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I think the general idea is that VC and PE are parasitic but at least VC helps to build. PE often destroys as this article shows.
by thisgoesnowhere 3y ago
I think the general idea is that VC and PE are parasitic but at least VC helps to build.
PE often destroys as this article shows.
- ramraj07 3y agoSo VC is Bhrama and PE is Shiva. One monetized building and another the deconstruction. If you're mad at just the destroying entity you're missing the point. The rot of PE stems from the same incentives of VC from where I sit and see.
- thisgoesnowhere 3y agoPE conceptually is fine and if it worked the way you describe then nobody (respectable) would be complaining. But in practice you see it turn healthy or struggling but fixable companies into a shell to hold onto debt. Its a twisted way of using the financial structure to siphon money without creating value (I would argue it destroys value instead). See the story of Toys R Us as an example.
- bagacrap 3y agoHelps to build what exactly? Airbnb, which makes housing less affordable? When has VC created something that approximates a public good, such as a hospital?
- thisgoesnowhere 3y agoStripe is great and is just a massive boost to the entire industry. Shopify is also great, Apple makes great products, Google search is fantastic. I could go on.
- bagacrap 3y agoI don't know the full history of each of these companies, but it wasn't my impression that Google or Apple really started with a lot of VC funding. Sure there had to be some kind of private investment to kick start them, but they became profitable on their own pretty quickly. "VC" to me is associated with finding an outside source of cash to fund your money losing business until you can drive competitors under. If revenue picks up the company can IPO, success! Then once it's public the stock price flatlines or drops (otherwise the venture capitalist left value on the table).
- thisgoesnowhere 3y agoYeah I think this is just semantics. Parasitic VC is bad and good VC is good. We can agree on that.