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> but this only works because people complain instead of starting rival business. This reads like fiction. When they corner the market it's of course trivial t
by consp 4mo ago
> but this only works because people complain instead of starting rival business.
This reads like fiction. When they corner the market it's of course trivial to just jump in and take that share. No way they will try to be disruptive to you or sue you to hell and back and of course the bank will loan you the pile of money to start a new company since there is no giant corporation to compete with who can squeeze you out in an instance.
- amazingamazing 4mo agoYour comment is the one that seems like fiction. You are saying PE is unbeatable? Per the article there is a backlog of orders. What is stopping one of the previous owners from creating another company and taking them? Sue for what exactly? Of course they will be disruptive, that is what competing means.
- DangitBobby 4mo ago> What is stopping one of the previous owners from creating another company and taking them? ... they sold the original business to retire??
- amazingamazing 4mo ago> ... they sold the original business to retire?? Conjecture unsupported by article
- DangitBobby 4mo agoSuggesting that the original seller could swoop back into the market is also conjecture unsupported by the article.
- AndrewKemendo 4mo ago> What is stopping one of the previous owners from creating another company and taking them? You will not find any investors. The investors that want to invest in fire trucks already invested in the PE fund and will give them money over any new start That’s the point There’s no money elsewhere.
- amazingamazing 4mo agoHow did the original businesses start to begin with? Also where is this information coming from? It isn't in the article.
- AndrewKemendo 4mo agoUsually from a loan or they bought someone out before the PE consolidation in that market really ramped up. This is the insidious part: small markets that grow organically over about 10-20 years are specifically what PE investors look for because they are cash heavy but don’t have desire to expand. So the owner gets 3M cash out for property worth 4M. PE bundles similar businesses (boba tea shops are a popular one) and then uses the net cash to get a loan to expand. They expand, cut corners then cash out on the net profit and then sell the skeleton in the pink sheets or go bankrupt. I’ve had to deal with investors and finance for almost 15 years now. My company was bought by a PE backed company and I knew fund owners this is how the economy works