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A ponzi is where you use the money from new investors to pay off earlier investors. Early investors in startups cash out during later funding rounds or acquisi
by fr0sty 15y ago
A ponzi is where you use the money from new investors to pay off earlier investors.
Early investors in startups cash out during later funding rounds or acquisitions.
QED.
- aristidb 15y ago"You" vs. "other people". In bubbles, the investors just trade the shares among each other. In a Ponzi scheme, there is a central party that refunds investors on demand, and does so with money from new investors. A Ponzi scheme is always a fraud, frothy valuations in a bubble might indicate market manipulation, but not _necessarily_ fraud.
- granfalloon 15y agoyou're forgetting the fraud part