>The company's purpose is to generate a return for their shareholders Absolutely correct, but who are the shareholders? If the investor owns less than half of

>The company's purpose is to generate a return for their shareholders Absolutely correct, but who are the shareholders? If the investor owns less than half of the company, then the majority of the shareholders comprise the founder and employees, who would come out way ahead selling their company at initial valuation. As you said, the goal of a company is to maximize all shareholders’ returns, not just the investor’s return. > The investor's initial valuation was inflated because the company failed to develop anything that would be worth an exit appropriate to that valuation. Why is the investor faultless here? Valuation could just as easily have been inflated because the investor failed to do proper due diligence in accurately estimating how much the company is truly worth.