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They probably mean a Pyramid scheme. In regular use, Ponzi and Pyramid schemes are interchangeable terms because you need new money to stay afloat. Legally they
by rovolo 5y ago
They probably mean a Pyramid scheme. In regular use, Ponzi and Pyramid schemes are interchangeable terms because you need new money to stay afloat. Legally they're different because a Ponzi scheme requires lying about where the returns are coming from, but a Pyramid scheme can be entirely truthful about the finances.
- randycupertino 5y agoIt's more of a funnel system where they take investor $$ and channel that to employees and in discounts to customers.
- Ekaros 5y agoPyramid scheme is system where income is derived from recruitment of new investors. Ponzi scheme is centralized system where profits of old ones is paid with money of new ones. VC start-up burning money to make things or subsidise customers in attempt to acquire them is neither. I'm really starting to hate when these terms that have rather specific and well understood meanings are thrown at anything. If you want to call it something just say it is big scam. Scam really could be anything. Not specific thing.