3 ms·

None. Private equity's entire business model is to suck the quality and staffing out of the product and make money off the gap between the product getting cheap

None. Private equity's entire business model is to suck the quality and staffing out of the product and make money off the gap between the product getting cheaper and people moving to a viable alternative.

silisili 3y ago
That's been my experience twice now personally, and having read numerous other accounts. They'll always tell you after purchase that's not the case, how they see long term value, want to grow it, etc etc. It's never true - if PE buys your company, run for the hills.
- qwytw 3y ago
  They already bought SUSE years ago though and their previous owners weren't much better (or possibly objectively worse..)
gumby 3y ago
Conversely I would answer "high". PE is basically a parasitic business, designed to suck money out of the purchased company until it collapses. You do this by borrowing a ton of money to purchase the company. Then for the privilege the company pays the buyer a special bonus that conveniently covers its costs (and often more) out of the cash it had on hand when bought. Then the buyer continues to get various payment streams, like guaranteed dividends or all sorts of other obligations, until the company collapses. Sad to say I'm not exaggerating. I say "basically" because there are a couple of exceptions. Dell was purchased in a special deal with the founder so that the company actually operates but the founder was enriched in the process. VC is a branch of private equity (an almost invisible pimple on the PE business TBH) where they don't buy the whole company and hope to make money on the IPO. But it's a small business: there are numerous companies out there with an asset base larger than the entire VC industry.
NotYourLawyer 3y ago
Private equity already owns 79% of Suse.
akomtu 3y ago
It's a sign of the last stage of an economic cycle when money is made by creatively destroying value, instead of creating it.

silisili 3y ago

That's been my experience twice now personally, and having read numerous other accounts. They'll always tell you after purchase that's not the case, how they see long term value, want to grow it, etc etc. It's never true - if PE buys your company, run for the hills.

qwytw 3y ago
They already bought SUSE years ago though and their previous owners weren't much better (or possibly objectively worse..)

gumby 3y ago

Conversely I would answer "high". PE is basically a parasitic business, designed to suck money out of the purchased company until it collapses. You do this by borrowing a ton of money to purchase the company. Then for the privilege the company pays the buyer a special bonus that conveniently covers its costs (and often more) out of the cash it had on hand when bought. Then the buyer continues to get various payment streams, like guaranteed dividends or all sorts of other obligations, until the company collapses. Sad to say I'm not exaggerating. I say "basically" because there are a couple of exceptions. Dell was purchased in a special deal with the founder so that the company actually operates but the founder was enriched in the process. VC is a branch of private equity (an almost invisible pimple on the PE business TBH) where they don't buy the whole company and hope to make money on the IPO. But it's a small business: there are numerous companies out there with an asset base larger than the entire VC industry.

NotYourLawyer 3y ago

Private equity already owns 79% of Suse.

akomtu 3y ago

It's a sign of the last stage of an economic cycle when money is made by creatively destroying value, instead of creating it.