391–400 of 414 posts
I hear that PE destroys products and culture to make money at all costs, but i don’t get how that can net them back the >$6 billion they paid for a company with <$300 million yearly revenue and negative profit.
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For a leveraged buy out, the most important thing are the cash flows. So if a business has enough $ to service the loan there should be no problem. Also good to remember that the business model of PE firms is to buy a leveraged asset, hold for 5 ish years, resale asset at a higher price than it was bought from. Ofc easier said than done, but these investors don’t get involved to lose money purpose
in tech, the LBO model is about selling at a higher revenue multiple than you bought it for, cashflows be damned. traditional LBOs are not done on revenue multiples
Also, CFs are the most important thing for an LBO. The point of this investment model is for an asset to pay for itself, so if it has no cash flows how can it possibly do that. Also cash flows =/= profit here. You can be cash flow positive and not be profitable.
And you are right about LBOs not being done on rev multiples
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I did this for about a decade (ending about a decade ago), and eventually gave up and went to gmail. I agree that it is a really easy thing to do and maintain, BUT when it did (rarely) break it was always at the worst possible time. The day a client was sending an important document. While I was on vacation. Etc. I probably only had to drop everything to fix my email server a handful of times, but that handful of tim…
Do you happen to remember what the handful of issues were? In particular, I’m wondering how much a self hoster can expect to have this sort of downtime because of breaking changes to the mail server application(s) vs. misc. server outages (e.g., breaking OS upgrade unrelated to the mail server) vs. having to fix “my mail was marked as spam” problems.
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I did this for about a decade (ending about a decade ago), and eventually gave up and went to gmail. I agree that it is a really easy thing to do and maintain, BUT when it did (rarely) break it was always at the worst possible time. The day a client was sending an important document. While I was on vacation. Etc. I probably only had to drop everything to fix my email server a handful of times, but that handful of tim…
I currently use google but am thinking seriously about self hosting. For those few times could the clients send it to you via WhatsApp?
To answer your question, no I've never corresponded with a client via WhatsApp
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That’s a strange cartoony impression that people here have but not generally what they do, even in the case of LBOs which I assume is what you’re referencing but only a small part of what PE firms do. They generally buy businesses that are managed poorly, manage them well, and fix them. And when they part one out like you are referencing, it’s usually a bad business. While what Eddie Lampert did to Sears/K-Mart was c…
it's like saying drugs are bad. there are definite harms done by cocaine, but penicillin has saved the world. PE'a easy to hate because, as a group, there are hateful things that happen. we don't have any mechanism for not letting the group be represented by an outlier individual.
LBO is just one type of PE, and even among LBO, there are lots of stories about firms fixing a business. For every K-Mart there’s a Dollar General.
And even with the K-Mart type stories, those businesses were 100% failing without intervention anyway. They might have done so in a way that was better for shareholders, and that’s an egregious example. But they’re not generally parting out thriving companies and leaving banks holding a bunch of bad debt. Banks are smart and good companies are almost always better off whole, just as a running car is almost always worth more than the parts.
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it's like saying drugs are bad. there are definite harms done by cocaine, but penicillin has saved the world. PE'a easy to hate because, as a group, there are hateful things that happen. we don't have any mechanism for not letting the group be represented by an outlier individual.
Drugs are a perfect example. They are a controlled market because the common person lacks the knowledge to safely use these by themselves. Good or bad. PE's, meawhile, don't really have that control. They are shooting all the hell up and we don't know if they are self destructively OD'ing or are curing cancer. Most high profile results are sadly the former. There's simply less financial incentives these days to inves…
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Drugs are a perfect example. They are a controlled market because the common person lacks the knowledge to safely use these by themselves. Good or bad. PE's, meawhile, don't really have that control. They are shooting all the hell up and we don't know if they are self destructively OD'ing or are curing cancer. Most high profile results are sadly the former. There's simply less financial incentives these days to inves…
The control (assuming we are talking about LBO specifically) is that they have to borrow the money from someone, and those someones are giant banks who also like money and aren’t stupid.
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I moved my .dev domains under Porkbun right after it was announced that Google Domains was being sold to squarespace, so you don't have to drop the domains. Porkbun is also quite friendly IME.
I don't know porkbun. I was looking at namecheap -- why porkbun?
The gold rush is over - private equity is going to squeeze every little drop from the companies that have been built and we will move on to Web 3.0 - which will be just like web 1.0 - self-hosting, link directories, newsletters, and guestbooks.
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As much as I'd like to see a web 1.0 revival, this won't happen. The traffic is controlled by Google and social networks. Most people don't have the skills needed to run their own website. A lot of valuable content is created by people without these sorts of skills.
I was part of some social computing facilities and burnt my own and friends’ money to offer basic stuff for people to publish basic html pages, small twitter like service, one nextcloud and one invidious instance. Within weeks, nextcloud was filled with pirated content sharing, html pages were hosting fake bank login phishing pages and moderation became horror. Our colo provider sent us some written warnings to sort…