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Don't confuse PE & VC the two a very different. You can think of venture capital as privately financed stimulus package focused on a few sectors. So its actual

• gruez 5y ago
  >You can think of venture capital as privately financed stimulus package focused on a few sectors. So its actually necessary for the growth of an economy. >PE on the other hand is more of the rent seeking behavior (buying cash flows) that we should really worry about. You don't think that VCs are buying future cash flows with their investments? Do you think they're just giving out free money because they're feeling generous?
  • max_ 5y ago
    > You don't think that VCs are buying future cash flows with their investments? The point is that they risk their own capital to create new opportunities in the economy. 'future cash flows' do not exist. Which is almost the exact aim of an actual stimulus package. >Do you think they're just giving out free money because they're feeling generous? No. Anything that needs to be sustainable has to produce more that it consumes. And that extra production is what people happen to call profit or "exploitation" depending on the envy. It is like saying the farmer is exploiting the fact that people can become hungry and need to eat. Or saying that a doctors should not be paid what they want because their primary job should be to heal people.
    • MathYouF 5y ago
      PE buys the shares in the now rent seeking businesses the VCs financed, that's how they exit. Many VCs these days are doing nothing more noble than creating more investment vehicles for rent seeking PE.