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The problem is that for small companies, it's too easy for management (aka founders) to funnel funds out without giving shareholders anything. That's why VC is
by lubos 12y ago
The problem is that for small companies, it's too easy for management (aka founders) to funnel funds out without giving shareholders anything. That's why VC is not interested because even if the company is a success, there is no guarantee they will ever see a penny.
- Negitivefrags 12y agoIf you are talking about that kind of fraud then can't you do that regardless of if you are trying to make a profitable company or one which you intend to sell?
- prostoalex 12y agoIf you're doing a build-and-flip, the incentive would be to limit the payouts in order to decrease the cash flow and improve the margins.