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Right, just like all of those people who put their money into Brewdog and then got nothing for it, while the larger investors potentially got made whole. It's a

by roughly 8mo ago

Right, just like all of those people who put their money into Brewdog and then got nothing for it, while the larger investors potentially got made whole. It's almost like there's two classes of investors or something - common people, and then another smaller set - a club, say - that the common people are not part of. You do not have access to the investments or financial instruments that the ultrawealthy do. Your investments are not like their investments, your returns are not their returns, the rules and regulations you face are not the ones they face. They are playing a different game than you, even when they're doing it with your money.

derriz 8mo ago
No equity holders got anything out of the liquidation - whether big or small [1]. Preference shares are just as worthless as common stock if there isn’t enough money to cover debt, tax bills, employee statuary entitlements/outstanding pay, bank loans, etc. [1] https://littlelaw.co.uk/p/the-1-billion-brewdog-deal-that-left-everyone-empty-handed https://littlelaw.co.uk/p/the-1-billion-brewdog-deal-that-le...
- roughly 8mo ago
  > No equity holders got anything out of the liquidation - whether big or small This statement is not supported by the link you posted, nor any other reporting I've seen on the matter. What I have seen is that TSG is senior to all of the other equity holders, so if there's money to be had, they're getting it before the small holders. Also from your link: > TSG was promised an 18% compound return on its investment (which means the amount they’re owed grows by 18% each year, with each year building on the last). > TSG’s preference shares entitle it to an 18% compound return on its £213 million investment. That return has snowballed over time. By 2024, it had grown to around £801 million. I can't say for sure, but I don't believe those terms were available to the average investor.
  - rcxdude 8mo ago
    Yeah, but TSG paid in 213 million and is (at max, assuming there are no creditors to pay, which seems unlikely) getting 33 million out. That's them cutting their losses, not making a profit. They could be getting about 15% of their money back instead of zero, but either way they aren't winning here, just losing slightly less hard than everyone else (though it sounds like the founders made out pretty well). (and realistically, it was probably obviously a very risky bet if the company was not able to get a better deal: these kinds of deals are generally a sign that things are already bad and getting worse, and someone is hoping to try to pull something from the wreckage: the deal obviously meant that if brewdog did manage to turn things around, the value would largely be sucked up by the preferred investors).
ericmay 8mo ago
> Right, just like all of those people who put their money into Brewdog and then got nothing for it Just like anyone who puts their money into an investment that fails... Stocks go up, stocks go down. I don't recall the exact details of the Brewdog investment scheme but some people losing their hat here is just a normal thing that happens in capital markets, otherwise investing wouldn't work. There's a reason that the predominant advice is to just set it and forget it with S&P 500 funds or total market (US or global) funds. It's up to you as an independent person to identify good opportunities for yourself or to consume and understand advice. > You do not have access to the investments or financial instruments that the ultrawealthy do. Your investments are not like their investments, your returns are not their returns, the rules and regulations you face are not the ones they face. They are playing a different game than you, even when they're doing it with your money. This is directionally true and angsty but it's beside the point. What's the alternative? Nobody gets to invest in anything? While "the wealthy" have access to other opportunities that you don't have access to, you still have access to enough opportunities to make money.
- roughly 8mo ago
  Neither George Carlin nor I am saying that the average person cannot invest in companies, nor that they should not be able to (well, I'm not, at least). We are both saying that the rules and conditions under which you and I invest in companies and the market are substantially different than those in which the ultrawealthy invest in the market, and ours carry both higher risks and more onerous terms. You can argue whatever you want about why that is or whether it should be, but we're not all on a level playing field, and that's relevant especially in an era when all of the answers to "how do I make myself secure against the vicissitudes of fate" involve "investing" in the market.
  - ericmay 8mo ago
    Nobody is on a level playing field, nor should they be. > and ours carry both higher risks and more onerous terms Can you speak to your experience in investing? I’ve invested in both public and private market deals. There’s nothing safer in my mind than low-cost index funds which are as accessible as running water for all Americans. $1 and a Robinhood account or something are all you need. Granted you can get higher returns of course in private markets but to suggest in general that they are both less risky and higher returning sounds inaccurate to me. I’m not trying to discredit your underlying point, the ultra wealthy do have access to better terms. They have more capital to deploy - it provides similar scaling discounts to other volume-based businesses.

by roughly 8mo ago

derriz 8mo ago

No equity holders got anything out of the liquidation - whether big or small [1]. Preference shares are just as worthless as common stock if there isn’t enough money to cover debt, tax bills, employee statuary entitlements/outstanding pay, bank loans, etc. [1] https://littlelaw.co.uk/p/the-1-billion-brewdog-deal-that-left-everyone-empty-handed https://littlelaw.co.uk/p/the-1-billion-brewdog-deal-that-le...

roughly 8mo ago
> No equity holders got anything out of the liquidation - whether big or small This statement is not supported by the link you posted, nor any other reporting I've seen on the matter. What I have seen is that TSG is senior to all of the other equity holders, so if there's money to be had, they're getting it before the small holders. Also from your link: > TSG was promised an 18% compound return on its investment (which means the amount they’re owed grows by 18% each year, with each year building on the last). > TSG’s preference shares entitle it to an 18% compound return on its £213 million investment. That return has snowballed over time. By 2024, it had grown to around £801 million. I can't say for sure, but I don't believe those terms were available to the average investor.
- rcxdude 8mo ago
  Yeah, but TSG paid in 213 million and is (at max, assuming there are no creditors to pay, which seems unlikely) getting 33 million out. That's them cutting their losses, not making a profit. They could be getting about 15% of their money back instead of zero, but either way they aren't winning here, just losing slightly less hard than everyone else (though it sounds like the founders made out pretty well). (and realistically, it was probably obviously a very risky bet if the company was not able to get a better deal: these kinds of deals are generally a sign that things are already bad and getting worse, and someone is hoping to try to pull something from the wreckage: the deal obviously meant that if brewdog did manage to turn things around, the value would largely be sucked up by the preferred investors).

ericmay 8mo ago

> Right, just like all of those people who put their money into Brewdog and then got nothing for it Just like anyone who puts their money into an investment that fails... Stocks go up, stocks go down. I don't recall the exact details of the Brewdog investment scheme but some people losing their hat here is just a normal thing that happens in capital markets, otherwise investing wouldn't work. There's a reason that the predominant advice is to just set it and forget it with S&P 500 funds or total market (US or global) funds. It's up to you as an independent person to identify good opportunities for yourself or to consume and understand advice. > You do not have access to the investments or financial instruments that the ultrawealthy do. Your investments are not like their investments, your returns are not their returns, the rules and regulations you face are not the ones they face. They are playing a different game than you, even when they're doing it with your money. This is directionally true and angsty but it's beside the point. What's the alternative? Nobody gets to invest in anything? While "the wealthy" have access to other opportunities that you don't have access to, you still have access to enough opportunities to make money.

roughly 8mo ago
Neither George Carlin nor I am saying that the average person cannot invest in companies, nor that they should not be able to (well, I'm not, at least). We are both saying that the rules and conditions under which you and I invest in companies and the market are substantially different than those in which the ultrawealthy invest in the market, and ours carry both higher risks and more onerous terms. You can argue whatever you want about why that is or whether it should be, but we're not all on a level playing field, and that's relevant especially in an era when all of the answers to "how do I make myself secure against the vicissitudes of fate" involve "investing" in the market.
- ericmay 8mo ago
  Nobody is on a level playing field, nor should they be. > and ours carry both higher risks and more onerous terms Can you speak to your experience in investing? I’ve invested in both public and private market deals. There’s nothing safer in my mind than low-cost index funds which are as accessible as running water for all Americans. $1 and a Robinhood account or something are all you need. Granted you can get higher returns of course in private markets but to suggest in general that they are both less risky and higher returning sounds inaccurate to me. I’m not trying to discredit your underlying point, the ultra wealthy do have access to better terms. They have more capital to deploy - it provides similar scaling discounts to other volume-based businesses.