How Private Equity Killed America’s Dreams

Her new Books, Bad Company: Private Equity and the Death of the American Dreamjournalists and wired alums Megan Greenwell It records the devastating impact of one of the most powerful yet less understood forces in modern American capitalism. Most are unregulated and washed away with cash mercilessly focused on profits; Private Equity Company It quietly reshapes the US economy and takes over a large industry from healthcare to retail.

Greenwell is currently written by about 8% of the population who work or employed in companies owned by private equity. Her book focuses on the stories of these four individuals, including the Toy “R” US supervisor she’s lost her best job to date, and the Wyoming Doctor watching his country hospital cut off essential services. Their collective experience is a terrible explanation of how innovation is being replaced by financial engineering and how shifts are paid by everyone except the top.

In a review of Bad company For Bloomberg, a longtime private equity executive, Greenwell accused him of searching for a sad story inevitably.Sad ending. “But Greenwell’s character chosen not only is private equity destroying the community, but it’s not just how American dreams are eroded, but also a creative tactic that people are fighting back.

Later last month, Greenwell spoke to Wired about what private equity is, what it doesn’t, how it transformed the various industries, and what workers are doing to regain their strength.

This interview has been compiled for clarity and length.

Wired: What is Private Equity? How is the business model different from venture capital, for example?

Megan Greenwell: People always confuse private equity and venture capital, but it’s completely reasonable that ordinary people don’t understand the difference. Essentially, the easiest way to explain the difference is for venture capital companies to invest their money in startups. They are essentially betting on the company and expecting a certain profit over time. They also play games that are generally much longer than private equity.

But the way private equity works, especially with leveraged buyouts, is that I focus on the book, that they are buying businesses entirely. At venture capital, you’ll put your money in and leave it to the CEO, and you’ll probably have a board sheet. However, in the acquisition model utilised, private equity companies are truly the owners and dominant decision-makers of the portfolio company.

How do private equity companies define success? What companies and companies are attractive?

At venture capital, VCS evaluates whether or not they trade based solely on whether or not the company thinks it will be successful. They are looking for unicorns. Is this company planning to become the next Uber? Private equity aims to make money from companies in a way that doesn’t actually require the company itself to make money. It’s like the biggest thing.

So it’s not gambling.

It is very difficult for private corporations to lose money in transactions. Even if they run the company on the ground, they still receive a 2% management fee. You can also pull out all these tricks, such as selling your company’s real estate or charging your company’s rent on the same land you own. When a private corporation withdraws a loan to buy a company, the debt from these loans is allocated to the portfolio company, not the private equity company.