Venture Capitalist and Corporate Raiders
What is a Venture Capitalist? It is a firm or an individual that supplies capital for a new business start-up. They also offer guidance, leadership, training and what’s needed to help the entrepreneurs become successful. They may even help the entrepreneurs to structure the business to take the company public. They aid in formulate, market an manage the IPO (Initial Public Offering) and usually sit on the Board of Directors. It is a relationship that can last for years.
Venture Capitalists also look for promising companies to takeover which are mismanaged by it’s Board of Directors, who undervalue the company, but the “VC” (Venture Capitalist) often sees the hidden value the Board of Directors (BOD) cannot see, or refuse to reveal to shareholders, so the BOD can exploit the share holders. There are two ways they execute a takeover, as a White Knighttn a friendly takeover firm or a Black Knight is hostile takeover firm. White knights are the Angel Investors, and Black Knights are seen like Vultures.
Angel investors look for companies do well and is usually a former Entrepreneur themselves. His takeover is often personally financed, and their intention is to guide, enlighten and shore up a business, teach the owners or the Board of Directors how to properly value the company; to be as successful as they are, and keep the company from the falling victim of Vultures or Corporate Raiders. Yes the make a nice sum of money as they are often already a stock holder. Improving the business everyone benefits. It’s a win, win, win, win situation. He wins the Board wind and the stockholders win and the employees win. The resulting increase cash flow brings security to the firm.
The Black knights’ agenda differs greatly. He must conquer and win for himself and his investors, regardless of the cost to all others. Some are motivated by greed; its like money has power over them. They worship money’s power and covet that power. They come in to raid a company of its resources and value and it’s existence. the borrow money based on future value of the company (this is a leveraging the buy out or as the say OPM (other people’s money). Let’s take a look at four of the ways creating or stripping out value
Buying & Selling: Know The Deal Before You Make The Purchase Or Sale
Venture Capital was going like gang busters in the 80s, with the names of guys like, Carl Icahn, T.Boone Pickens, Sir Francis Gold Smith and Reginald Lewis. How do they do what they do? Most Venture Capitalists uses private equity or OPM (other people’s money) to help finance a start-up or acquire an existing businesses. Usually when someone wants to start a traditional brick and mortar business that required large sums of money to get started, they look for venture capital. This sometimes worked out great but there may see consequences. The venture capitalist were part owner of the business, and sometime owner’s vision in starting the business conflicts with the Venture Capitalists. This can lead to serious problem.
There have been occasions where the conflict was so great the start-up wanted out. There have also been some unscrupulous deals made, where the money guys could see the huge potential of the business and the start-up is eventually forced out and sells his shares well below value just to get out. Another problem that occasionally surfaced was the venture capitalist (VC) loaded up the contract with terms adverse to the owner. They purchase a percent of ownership in the company, and determine how and when payments are made, which can drain crucial reinvestment money out of the venture and the owner comes to regretted it the deal. There are
happy endings also, and he sun rose on some companies that were careful and vigilant going in, and protected himself from predatory companies to find that jewel that would be a real partner and grab a hold of the lenders vision, kindly and sympathetic guidance and great success ensues.
Seek and You will find:The Search For Value (If you know what to look for)
Another thing that Private Equity does is it searches for undervalued businesses. They approach the company asking to see the balance sheet, the mission statement and determine the companies true value, but also look for information to leverage their position in an offer they would later make. Now there are two approaches that have to be made. If a company is privately held, it require a different approach than a publicly held company. With a publicly held company, they make an offer called a “tender offer” to the stock holders to buy stock by a certain date, Based on that information, the “VC” would make an offer to buy the business at a huge discount. that the board of directors are resistant to. This is a hostile takeoverr, and most often when they got the deal, the”VC” (in this instance the “VC” is a “Corporate Raider), would borrow their investor’s money to give them leverage. The goal is to buy the ownership as cheaply as they can, boot out the board of directors and replace them.
Raider Rabble: White Knights, Debt, and Poison Pills To The Rescue
Some businesses would do various things to make the “VC “not want to buy the business and that is called a “poison pill” . Another tactic was to find another company to come buy the company at a better price, or a another buyer would come in tender a more attractive offer. They are ”White Knights, because he comes in to rescue the business from a hostile takeover. Or the Board Could Load the company up with massive debt temporarily to try to stave off an unwanted suitor Buy buying up enough stock they are buying ownership in that company Giving the “VC” voting rights. The goal is to acquire controlling interestt in that business about 51% or greater. this is one of the reasons, many companies maintain a 51% or greater voting rights an a controlling interest to proactively stave off takeover attempts.
Proxy Fight: Show Some Claws And Watch The Sweat
Another thing that can go wrong for a Board of directors, is to have a proxy fight a proxy fight where one or more stock holders defect to the raider or the “VC” looks for stock holders to side with them, in sometime unscrupulous ways. to vote by proxy against the Board at the “VC” direction. This is a proxy fight, the stock holder they get to defect has helps them fight, Sometimes the proxy would plant seeds of descent among stock holders against the Board of Directors, or give convincing speeches pulling fellow stock holders toward the raider’s pitch. Sometimes the ”VC” had to sweeten the offer in order to successful attract stock holders to vote the board out and them in. Sometime the Raider is a wolf in sheep’s clothing, making promises to the stock holders, they never intend to keep. Mostly they promise to create value in the company, they do, then they dump the stock and get out. The final disposition of the business can be great and sometimes, they company goes from undervalue to over valued and that can cause the stock to crash, once the truth comes out.
The Deal: There Is A Way That Seemeth Right To A Man
Now the next thing is to decide how to get the most value out of a company. there are about three of four ways. What we cover next does not apply to Angel investors
- bring the company to sustained profitability. If the company is geared for growth and sustainability and producing ongoing income in the way of dividends, then that is the route they take.
- If breaking up the company the company and selling off the parts is the most profitable for the raider, that is the way they go.
- if they know that by buying another company that has what they need to make the business complete, competitive and very profitable, they find and buy, or may have already purchased that company, (asset stripping) sell of what they don’t need (redundancies), and integrate the new acquisition into the company and get as much money out of it that they can. The advantage is they don’t have to start it from scratch and can move faster to reach their goal. in this instance, unfortunately, people lose their jobs, income and sometimes their pensions or at least the matching contributions.”Let It Go Bankrupt”: If That Sound Familiar It Should
- Now here is the one that I feel people really need to understand. It is the one that Bain may have engaged in from time to time What Governor Rick Perry calls “Vulture Capitalism” it is where after careful consideration it is found that a business would be more profitable if it goes bankrupt. It is rarely a time when a company goes belly up that it is not calculated, a deliberate conscious decision to eviscerate a business, and force it into bankruptcy. Whether the businesses doing well and would continue in existence for many years, or it is going to go out of business in a short period, the vulture smell death on it. Some companies are just so vulnerable to being taken over, and are not aware of it. these companies have intrinsic value, but the most value is extracted if it is forced into bankruptcy. Here is one of the tactic used. they vultures borrow money from a bank or their investors, (called a “Leveraged buyoutt” LBO) they buy the business, then load it up with debt based on assets, pull out what’s invested, plus a lot more. then they begin to cut back, cut corners and cut pay and benefits even taking the matching contributions by raiding the pension fund, demoralizing the worker. and forcing productivity goals that are near impossible, especially without internal working capital as the vulture takes all the profit, adding to their pot.
Redistributionism: Romney The Master Redistributionist
It amazes me that Romney is so incensed that 47% of Americans pay no taxes, that they are government dependent, lazy, morally indigent moochers. It seems he hate them for trying to survive and try to make their families more succesful than they were in life. His remarks have cut deep into the heart f the American electorate. Even People from other nations were stunned by that video. But what amazes me most is that Romney, when he benefitted from Redistribution, he called it success. How did he benefit from redistribution? As in the text above, when you make a hostile takeover, the object is to get as much value or money out of the company that you can and make a quick turnover for your investors. One of the first things is to cut the payroll and increase productivity, fewer people working harder. I’m not sure if they even look at the experience of those they lay off, and how the loss of that expertise affects the bottom line, but it should be a major consideration. But back to my point. The three things that I am aware of VCs like Romney do is to fire workers and hire them back, ie, reapply for their jobs. Does that sound familiar? they did the same thing to someone close to me and then fired them anyway It was all a ruse they never had any intention from the beginning to rehire them.) so if they do hire them back itis at arouind 20% to 30% less income, so Romney pocked the difference. the second thng they do in two ways, they take back company matched contribution to pensions and retirement funds, or they just take the whole thing. It’s called “Raiding the Pension Fund”. the third is they reduce or eliminatef the cost of the benefits package, pocketing that money. The new management have no agreement and thus take no responsibility for the loss to the workers.
Mitt Ripoffmey is a master of these redistribution tactics. So you see why I’m amazed that Romney could be so hypocritical, beating up on some of the very social economic people he devastated, while working at BAIN CAPITAL. If this man could take these middle class worker’s pension and have no compunction about it, then have th nerve to demonize people who have don nothing to him speaks to his disconnect from reality, and an intact moral compass.
The sorriest part of this approach is the workers are in a trap. even after they suffer immediate and future financial losses, they continue to be faithful, working as hard as they can trying to keep their jobs and the company viable, all to no avail. the companies demise is it’s predispose. The workers are devastated when they come into work and it’s padlocked, or they are assemble to be told you are all fired, the business has breathed it’s last breath. after they have stripped the workers dignity. made it impossible to turn out a great American product, their market share suffers. Now you may ask Why would they do that? Tax write-offs. When a business fails it is written off and they get money from the government for the bankruptcy. They may also ship (sell) some of the jobs that are transferable off shore.
Now what most people don’t understand is how many people are affected by these tactics. This death ripple is more far-reaching than is told; so much farther than a plot of land on which a business is physically built and a community destroyed. While we only see the workers at these firms, and in particularly in small towns, we do not see the local business owners that rely relativity on the disposable income of that now bankrupt company workers. they have employees also, and sad to say a ripple of unemployment fans out across that community. many small american towns have been almost wiped of the map because of such dealing. the loss of tax dollars from workers and the business, and having to pay out unemployment as well as Simply hurts the United States. when the government loses revenue the Middle class and Lower income families end up suffering the most. our education system is affected, our police forces and firefighters, the librarians all over the United States. The mortgages that end up in default and other bills that go unpaid causes losses for other business, and that is loss of revenue.
The total estimated damages have never been properly tallied. It’s more than just a company, it’s the people who lose out at the company that was forced into bankruptcy that we tend to look at. we hardly ever look at the indirect job losses that come about by Vulture Capitalism. Why is this important? One of our candidate if you actually understand what he is, you have to understand what he does, what he knows and how he used what he knows, and if he’ll do the same thing to the United States. One of the most frightening thoughts as I listened to Romney, was the thought for 25 years them man was a Venture Capitalist, who looks for value in a vulnerable company and exploits that value in different ways. they goes out to own these business to do with it as is most profitable for him and his pocket. When as Governor, he cut taxes for himself and his wealthy friends, further starving the local government costing job losses. ”I like to fire people who provide services to me.” And “Let It Go Bankrupt” are at his core, no, wait, he actually said himself, ”I Have No Core”.
Let’s not forget to mention a recent battle with hiding money ( loss of revenue to our government that affects military budget, an other needful government services, FBI, Secret Service, NSA, CIA), Lord God, this is starting to sound Anti American in offshore accounts. Investments in companies that offshore American Middle Class jobs, to companies he’s invested in from his secret accounts to avoid paying his fair share like the middle class, through companies he invested in that specialized in finding off-shoring jobs. We may never know how much damage this type of practice is part of our unemployment situation, and to our government.
Open Our Eyes: The Greatest Purchase In History
And now the country is in a vulnerable state, possibly undervalued and ripe for takeover. It would be the biggest leveraged hostile takeover ever devised, you just need someone with the guts and the money to attempt it. To come in and make a bid for ownership of our nation, and decide how much value can be drained from our economy, our nation, its people and her resources, any way they see fit. Does that sound like a frightening concept to you as a Middle Class American? It should, it should send chills up and down your spine one candidate did this for 25 years since 1977, and says we should trust him to run our country? Is he looking for personal ownership of the United States? If he did, it would be the largest hostile takeover in LBO history. He has help in financing it, Billionaires and Wall Street. America may think he’s just trying to buy an election, but here is what we suspect. His billionaire investors are looking to make a return on investment (ROI) in the form of exclusive personal ownership rights over America and Middle Class Americans. BIG HINT, They are NOT just giving all those hundreds of millions of dollars away, they want more money out then they put in. Take a second look at all I’ve said here and imagine each, knowing that they “VC” is looking to make a huge sums of money for themselves and their investors.
His refusal to show as any tax returns as The president has done, he may very well be hiding something very damaging, that could cost him the election. Is he hiding something? If he finally hands one over, Will it be a doctored accounting to hide income. why only one extra? What would the problem in releasing his tax returns? Why isn’t Donald Trump pressuring Romney to release his tax returns like he pressured the president to release his birth certificate? He is suspiciously stone cold quiet on this. I don’t expect him to jump into this. he rightfully has to protect his name which is his brand. Of all the people who have branded their name I think trump has done it better than anyone anywhere. At this point you can make
So the Wealthy have brought this country to its knees. The tactic of bankrupting companies, off-shoring American jobs and hiding billions of dollars overseas, and investing overseas through these secret accounts, have all beneficially starving our economy to death. The loss of revenue from these business, the loss of revenue from the workers, the payout of unemployment, the revenue from the money offshore and the earnings on investments made. this has become a huge drain on our economy. But they want to blame the President (like the kid who took the cookies and blames his siblings) , and so called”entitlements” for poor and middle class; but they feel entitled to huge tax breaks. (The tax break for one billionaire could employ a dozen or more people). This Huge drain on our economy is their doing, however, they want tax cuts to further drain the economy. By draining the economy as they have leaves America, as they see it, a vulnerable ”Corporate Takeover Target”. I believe they see it as the time being right”
Heads Out Of The Sand: Open your eyes to the truth or fail to keep your liberty and freedom. If you don’t want to be the slaves of the few very wealthy, Step Voter suppression and fight for your freedom They have Democrats and Republicans so much at war with one another, (it’s a smoke screen) that we can’t see their evil hand at work (God said through Apostle Paul, “
1Ti 6:7 For we brought nothing into this world, and it is certain we can carry nothing out.
1Ti 6:8 And having food and raiment let us be therewith content.
1Ti 6:9 But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition.
1Ti 6:10 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
God is not saying not to be rich, but don’t pursue it for money’s sake or for the love of it. the spirit behind wealth is good or bad. The perceived power of money is a great temptation. It is just a tool for you to use to carry out great things. Like feed the poor and destitute , helping the widow and the father less (especially our veterans and our domestic services which endanger their lives in service to our communities,who gave their lives for freedom). To support the Gospel message to reach souls who do not know Christ, and that God loves them.
It’s time for America to wake up DO some research on Venture capital Investorwords.com and businessdictionary.com for definitions.
Let us also remember that it was the Wealthy of Wall Street who almost killed our economy back in 2008, (And they want a second shot at it. ) but they continue to blame the President and Middle Class American’s and the poor They needed desperately to win the last election, to set appointments to the supreme court and justice department, officials who would allow them to continue to rig elections and only they can win. it’s why they are holding of jobs and unemployment, they needed to keep it above eight percent to damage the president on his promise. The continue to off shore jobs robbing America of revenue and leave the Middle Class footing the bill
The Remarks that Romney made at th secret Fund raiser are despicable, (here i the link if you have not already seen it [http://www.motherjones.com/politics/2012/09/watch-full-secret-video-private-romney-fundraiser] These Remarks have inflicted a deep impact on the 47% and more. It seems Romney’s supporters are waiting for the debate to decide if they will drop Romney from their donation list. To my this video shows how much Romney dislikes Middle Class, it seems he views them as less than what gets stuck to the bottom of his shoes. See who the 47% is, which Romney hates so much (http://www.motherjones.com/politics/2012/09/charts-47-percent-romney-tax-data)
Each link on this page is from businessdictionary.com