Author Topic: Non-public market strategies  (Read 2965 times)

LC

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Re: Non-public market strategies
« Reply #10 on: March 30, 2020, 12:15:15 PM »
In general:

Small business are already cut to the bone. They have nothing left to give - truly on life support.

GiantCos are not. As evidenced by the CEO salary cut anecdotes.
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Jurgis

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Re: Non-public market strategies
« Reply #11 on: March 30, 2020, 12:26:04 PM »
In general:

Small business are already cut to the bone. They have nothing left to give - truly on life support.

GiantCos are not. As evidenced by the CEO salary cut anecdotes.

In general, I agree (there are shades, but in general you are right).

I'm afraid that with the attitude in this thread small businesses should not expect much (anything?) from investors either.

Government help it is!
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
"Money is an illusion" - Not Karl Marx
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Spekulatius

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Re: Non-public market strategies
« Reply #12 on: March 30, 2020, 03:11:55 PM »
In general:

Small business are already cut to the bone. They have nothing left to give - truly on life support.

GiantCos are not. As evidenced by the CEO salary cut anecdotes.

In general, I agree (there are shades, but in general you are right).

I'm afraid that with the attitude in this thread small businesses should not expect much (anything?) from investors either.

Government help it is!

Buying shares or participating in an secondary offering or a downround of a startup is anonymous. Giving a vulture loan to a business in dire straits is not and it pretty much hand on. Same than being a slumlord for example.

It’s two different things. I don’t think there is something wrong with either one necessarily (your CC Company will happily rip you off with 20%+%  interest rates) but dealing with individuals is high touch and you could get yelled at or worse.
« Last Edit: March 30, 2020, 05:00:29 PM by Spekulatius »
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Jurgis

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Re: Non-public market strategies
« Reply #13 on: March 30, 2020, 03:18:31 PM »
... participating in ... a downround of a startup is anonymous.

No, it isn't. Not at angel investing level. I think it was made clear we are not talking about Uber-size startups.


Anyway, I think there's no point to continue this topic. It has been made abundantly clear that investments into small businesses experiencing difficulties is sleazy and reprehensible.

At least government support isn't.
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
"Money is an illusion" - Not Karl Marx
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"American History X", "Milk", "The Insider", "Dirty Money", "LBJ"

Kaegi2011

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Re: Non-public market strategies
« Reply #14 on: March 30, 2020, 08:05:59 PM »
Are we talking about the same small businesses?  When I think about small businesses, I think about single proprietor type of situations (restaurants, lawn care service, small landlords, etc.).  I'm not thinking about startups in SF

So according to you someone who started restaurant should be treated differently from someone who started a software or medical device business?

Wow. Just wow.

Quote
Small businesses tend to be owned by one person or family, not a bunch of institutional investors.  So when you're buying shares at a 50% discount vs. two months ago, you're not buying it from the person who's livelihood has vaporized through no fault of their own. 

Public companies have a choice on their capital structure, and have access to equity and credit markets (albeit expensive now), something that doesn't really exist at the moment (pending the CARES act...). 

Even private but somewhat larger businesses have access to private equity capital (again, expensive).  Nobody's doing the dilignece on some 5mm local business to figure out whether it's worth investing in or not - it's not worth the time if it's institutional capital. 

So if you see no difference between buying shares at 50% price vs. going into your local restaurant and giving the owner a 25% interest rate loan with the intention of foreclosing and owning the business and negotiating with someone who has worked his whole life to get there, then that's where we'll differ.

So you are totally fine giving your money to large company that's in dire straits by buying a secondary or buying their bonds, but you won't do that for a small business because that's exploiting the owner?
And you are totally fine that this small business will go under because you gave your money to the big corp instead?

Thanks for the ethics lesson. I guess.

Are you just looking for a fight to pick?  I made it abundantly clear that my ethical standards are just that, MINE.  Clearly I'm not not the only one, so please stop the condescension.  I'd be happy to dive into more detail on the differences between buying a security for a discount from a mutual fund vs. an owner, but clearly you're not interested in hearing another perspective, so I'm not going to waste my time. 

I'm sure you have no problem selling PPE on ebay right now for a 100x markup because that's the market and you believe in free market in all instances.  Fine - you do you.   

Jurgis

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Re: Non-public market strategies
« Reply #15 on: March 30, 2020, 09:36:12 PM »
I'm sure you have no problem selling PPE on ebay right now for a 100x markup because that's the market and you believe in free market in all instances.  Fine - you do you.   

Project much?
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
"Money is an illusion" - Not Karl Marx
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"American History X", "Milk", "The Insider", "Dirty Money", "LBJ"

SharperDingaan

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Re: Non-public market strategies
« Reply #16 on: March 31, 2020, 06:52:38 AM »
You're in business, you have a corporate social responsibility, and the size of your business just gives you greater ability. Hence 'we the people' expect more from a large business, than we do from a small one. It's called leadership, and either you have it - or you do not.

To some this is ridiculous, business is not a charity, and we're in business, to make as much as possible.
Go on TV, talk my book, and actively trade against it while doing it; perfectly legal, but ethically challenging. As Taleb points out; if the punters are far away from me, they exist to be taken advantage of. Repugnant to many.

In all markets, there will always be these people.
Doesn't mean you have to do as they do.

SD
 


Kaegi2011

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Re: Non-public market strategies
« Reply #17 on: March 31, 2020, 12:17:24 PM »
I'm sure you have no problem selling PPE on ebay right now for a 100x markup because that's the market and you believe in free market in all instances.  Fine - you do you.   

Project much?

Absolutely guilty as charged.  But you should hold up a mirror as well. 

Jurgis

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Re: Non-public market strategies
« Reply #18 on: March 31, 2020, 01:20:21 PM »
I'm sure you have no problem selling PPE on ebay right now for a 100x markup because that's the market and you believe in free market in all instances.  Fine - you do you.   

Project much?

Absolutely guilty as charged.  But you should hold up a mirror as well.

Well, I asked pointed questions and stirred the pot. Maybe too pointed. But it elicited some interesting answers. So thanks for that. 8)


Just to return to OP, netnet asked "What are some ethical ways of proceeding." (emphasis mine).

It appears that there were very few (no?) ideas.

Which I think is sad both from investors' PoV and from a suffering small business' PoV.
But I do understand that it's hard to find a win-win solution. Even harder to find solution that is both win-win and also has win-win optics.
It's not impossible, IMO there are people who have done it. Not gonna point fingers, they may or may not volunteer their experience.
Still hard.
So I'm gonna repeat my easy conclusion: Government help it is!
(I have more controversial conclusions, but I think the pot was stirred enough.  ::) )

Anyway, good luck, have fun.
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
"Money is an illusion" - Not Karl Marx
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"American History X", "Milk", "The Insider", "Dirty Money", "LBJ"

Spekulatius

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Re: Non-public market strategies
« Reply #19 on: March 31, 2020, 04:46:38 PM »
You can argue that if you are dealing with a stranger, there is no bad offer. An offer is just that,  and the solicitor isn’t obliged to take it. You could argue that the worst of is no offer, not a terrible high interest or cheap one. Same Opi you. Are a lowball bid on a stock that gets filled , because someone gets a margin call.

It gets a bit more difficult if there is a social construct around it like the solicitor is a friend or even someone  from the same town or it’s Deal with a community bank. Then there is an issue, both moral and reputational for both sides.
« Last Edit: April 01, 2020, 04:13:36 PM by Spekulatius »
Life is too short for cheap beer and wine.