What he does not say is Profitshare. All of these forms of Private Equity companies, that hold no Bank licence, are basically into swapping companies just as in Real Estate House Swapping.
You give it a nice paint shop, fix what's needed so it stays dry and hold it in and ever rising market to sell it again by a prettier flyer than you bought it on to someone with more money.
No one would separate the invested sum from the cash flow they make owning parts of the company to than look at what they can do with that cash flow.
Having one big sum is much different from having a cash flow.
Sitting cash looses value by inflation, while cash flow creates calculatable spending frames.
In an extreme and simplified excample would they put 10 Million into one company over a tenure of 5 years, creating by their burn rate 2 Millions of debt that they pay off when having sold the company for double.
Instead, these 10 Million could be invested into several companies that not only cover the burn rate by sharing parts of their profit, but give some left overs at the end of the month and year.
If we split that 10 Million wisely, work with those companies to optimise profits in a healthy way, we succeed if we create per annum enough left over to buy one more company....
#cyberpunkcoltoure
