4 ms·

Parts? I'm quite biased here, having been in a few ventures that got absorbed by PE; "Vulture Capital" is being kind, and I maintain that I'd love to see PE as

• clairity 4y ago
  PE can definitely be 'problematic' to put it lightly, but i did witness one example of a PE deal done well: a company was bought out by PE with the help of an involved CEO, who set aside a pool of money for employees if they hit key growth metrics that allowed the PE firm to sell within some number of years. a number of otherwise not-well-compensated employees were about to buy houses/pay off mortgages who otherwise wouldn't have been able to do so. there's a difference between finance-based PE and fundamentals-based PE, with the former unfortunately being much more prevalent than the latter. finance-based PE uses financial leverage to restructure a company's capital structure to squeeze out gains, which is not really improving the company at all, and usually to the detriment of the now debt-laden company.
• jjoonathan 4y ago
  I thought it wasn't Ponzi so much as a strategy for attentive management companies to front-run inattentive investors to liquidation. It's the management version of employees walking out of a failing startup with aeron chairs and coffee machines -- so, naturally, a thousand times more damaging and a thousand times less punished.
• jeffreyrogers 4y ago
  PE might be unsavory but I don't see how it is a ponzi scheme.