Why is that even legal? It doesnt benefit society in anyway, just hurts it by removing work places. I dont know how it works finically but at least it sounds like it could also be used to evade taxes with that debt bullshit. Is this using some loophole in existing law or is it something that doesnt have anything restricting it?
Manticore@lemmy.nz 1 week ago
Isn’t the MO for venture capitalists to run businesses into the ground, make them owe debt to themselves, cannibalise businesses from the inside and then run away with a profit while they bankrupt?
Not surprising to make a decision that kills a business because the entire point is to kill the golden goose
reksas@sopuli.xyz 6 days ago
baggachipz@sh.itjust.works 6 days ago
They’re called Vulture Capitalists and they make a lot of money destroying companies like this. There’s no law against it, it’s just buying a business and running (killing) it as they see fit. Livelihoods of employees don’t matter, they’re just assets to be sold as well.
reksas@sopuli.xyz 6 days ago
Its like if there was no law prohibiting stealing if you just do it in certain way, or arson. I wish there was something one would do about it, but its so damn difficult to resist even by saying something should be done about it since vast majority of people simply dont care or dont want to say too much if they do. I wonder if it has always been like this even in the past or if it turned like this at some point.
Almacca@aussie.zone 1 week ago
I know almost nothing about finance, by choice, but isn’t that equity fund managers that do that? Regardless, I reckon it’d be pretty funny if all equity funds were made illegal by the Criminal in Chief because they have the word ‘equity’ in them.
Vinstaal0@feddit.nl 5 days ago
It’s not really their MO, the idea is that they invest in high risk startups in a trade of ownership. Startup’s are already at high risk of failing.
The thing with private equity (VC is a subversion of PE) is that they do everything in their power to gain as much profit as possible. Most of the time in a short time span (1 to 5 years) and then sell the company or dividend out as much as they can. That’s why some countries (like NL) have laws at how much you can dividend out btw, it is still easy to kill a company.
They will also not kill cash cows, aka companies/products/services that generate a nice amount of profit without doing much to generate that profit.
Using PE is can be a decent option, but treat it like crowdfunding financing. Promise them a certain ROI and give them a minority interest in the company structure (50% of shares mines a single share or less).
Ledericas@lemm.ee 1 week ago
PE firms do that, VC wants a return of thier investment.
futatorius@lemm.ee 1 week ago
VCs are value extractors too, they just use a different methodology from the PE pigs.
Vinstaal0@feddit.nl 5 days ago
PE’s also want a return …