• conditional_soup
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    6 months ago

    You know, the funny thing is that nominally, the point of PE is to take a struggling asset, get it back on its feet, and sell it for more than you bought it for. It’s flipping for businesses. That honestly doesn’t sound bad, it sounds like probably a good thing when you put it like that. IRL, though, it just ends up being vulture capital all the way down.

    • xmunk@sh.itjust.works
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      6 months ago

      Yea, I’d saying that a company seeking outside investors or trying to bring on managers or consultants… these aren’t inherently bad things - it’s just that in practice it’s fucking awful.

      In our modern capitalist system the flow diagram is basically: team/founder starts a company, company does well and builds a customer base, team/founder cash out, PE/profit targets force under investment in company health, company gets worse, new team/founder outcompetes… though a huge problem at the moment is that having a billion dollar slush fund can really draw out being outcompeted i.e. Uber/literally anything in silicon valley.