The Working Person's Guide to the Industry That Might Kill Your Company

How It Works

Appelbaum is quick to note that for smaller companies—say, those with a value under a few hundred million dollars—private equity can be a useful partner. PE firms can provide those smaller, regional companies with financing when local banks aren’t available, and smaller companies tend to actually have the sorts of inefficiencies that PE firms can fix to legitimately make the company run better. But smaller companies mean smaller profits.

Private equity has a great business model—if you’re a private equity manager. First, a PE firm raises a fund using money from large investors, including pension funds investing the, many of them in unions. The firm puts in a small amount of money and borrows a large amount of money in order to purchase a big company. That debt is owed by the company itself. Now the PE firm owns a company, and the company has a huge amount of debt that it didn’t have before.

Australia Australia Latest News, Australia Australia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Amid a company meltdown and employee revolt, WeWork is sponsoring LinkedIn ads offering to help address 'lagging team morale'The promoted ad advising on 'lagging company morale' comes as many WeWork employees have called out the startup's chaotic work culture. This is so American: The Trust That Went Bust ver. 2.0
Source: BusinessInsider - 🏆 729. / 51 Read more »

WeWork's IPO smackdown won't change VCs, but shows what not to do - Business InsiderAn expert who studies venture capital says the WeWork 'smackdown' won't change the way the industry works — but he's telling investors how they can avoid the same mistake
Source: BusinessInsider - 🏆 729. / 51 Read more »