How Private Equity Killed the American Dream

Her new the book, Bad company: The death of special capital and American dreamJournalist and string Alum Megan Greenwell Chronicles of destructive effects of one of the most powerful but poorly understood forces in modern American capitalization. Cash, mainly unregulated and ruthlessly fleeted flush, Private capital firms Often the retail of health, often re-established large parts of the industry that pose a health-threatening industry.

In the United States, twelve million people, now private capital, Greenwell writes or about 8 percent of the total population. His book focuses on the stories of a toy “R”, which is a wyoming doctor, who has lost the best of four of these individuals. Their collective experiments are an account of the cancellation of ways to be repaid by anyone other than how the innovation is changed and changed by financial engineering.

At a glance Bad company For Bloomberg Private Capital Capital Executive, Inevitably Blamed Green To Search Sad Stories “sad endings“But the characters he chose the characters are just sitting back and follow their communities.

Greenwell said that at the end of last month, what special capital was, and how the employees do to return the power of workers.

This interview was edited for clarity and length.

Wired: What is private capital? How is the work model different from the capital of how he said, the company’s capital?

Megan Greenwell: People are always confused by private capital and enterprise capital, but are completely reasonable that normal people do not understand the difference. The easiest way to explain largely the difference is that the enterprise is usually investing in capital firms in general. In fact, the company takes a share of income over time. They are also playing a longer game than private equity.

However, this is special capital, especially in the book, which is also a private capital, which is obvious. You put your money in the venture capital, you are entrusted to a CEO and probably have a plaque seat. However, the private capital company in the Leverged Buyout is really the owner and control of the portfolio company.

How do private capital firms define success? Which companies or businesses are attractive to them?

At Venture Capital, VCS evaluates only one deal, regardless of what the company thinks will succeed. They are looking for unicorns. Will this company be next Uber? Special capital is looking to make money from companies in ways that do not require the company’s self. This is like the biggest thing.

Thus, it is low in a gamble.

Special capital firms are very difficult to lose money in deals. Although they take the company to the ground, they receive a 2 percent management fee. They can also take all these recommendations as to sell the company’s real estate and then rent in the same country. When special capital firms receive loans to buy companies, the debt of these loans is not allowed to a private capital firm, but portfolio.