Usually when a company sells to private equity, it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option.
That is often not true. My former dentist had a nice family practice that made very good money. Then a PE company came in and offered a ton of money which was an offer he couldn’t resist. The PE slowly took over more and more small practices in the area until they had a significant market share which allowed them to raise prices and reduce service. Patients didn’t really have anywhere else to go. I see the same happening with vet practices. The big corps are buying more and more small practices so you basically have almost no other choice than paying higher prices.
> Then a PE company came in and offered a ton of money which was an offer he couldn’t resist.
He is going to retire sooner or later and what then?
There is a cultural paradox where it's socially unacceptable to profit too much from a necessary good or service, but you can profit as much as you want from non-necessary goods and services. In the past, this pressured small practices to keep their service standards high and prices relatively low. However, due to the accessibility of information and finance, rather than start your own medical practice, you can become similarly wealthy with half the work just by being employed as a doctor/dentist and investing your money in an ETF. Of course, people with money swoop in to "correct" the mismatch in supply and demand, which leads to worse service and higher prices.
The knee jerk reaction people have towards these situations is to "punish greed", but that doesn't change the underlying market forces. Much like rent control, it may work in the short term but makes the problem worse in the long term.
> Usually when a company sells to private equity, it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option.
private equity being able to offer more money for your practice when you retire than a dentist who would have continued the small practice is not financial hardship or being unable to find a successor, so please don't pretend your two comments are equivalent.
This comment is much more honest: there was room for financialization, so people did it. They were unable to find a successor who would pay more than a group of people that wanted to wring money out of their company. Gives the lie to the "selling to private equity would be the least bad option" conclusion, though.
Sure you could voluntarily sell your business at less than its market worth to help a younger dentist, but someone else with the same net worth could donate the same amount of money to help the young dentist as well. Why is the expectation of social good placed entirely on you?
"it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option."
It should be
"PE offered by far the most money and will make up for it by raising prices and reducing service"
That's exactly what happened with that dentist practice. For years I went there, got a cleaning and was told "keep doing what you are doing". After the takeover they found some problem with almost every visit and fixing it coincidentally would have cost exactly the $1500 my insurance was covering each year.
As a first order approximation, closing down a nearby hospital and sending patients to one further away is only worse than PE if PE doesn't worsen care to such an extent that more people die there than would've en route to the other one. And most companies aren't about lifegiving care anyways.
The commenter spoke specifically about the lone hospital in an area. e.g. rural areas
Hospitals in those areas tend to not offer as high quality of care as most urban/suburban hospital.
When the only hospital in an area closes, it's not just a matter of going slightly farther out for care. In many cases, it's just not possible for people.
This is a big issue with the idea of socialized health care as it could happen in America. Right now we already have a two (or three) tiered healthcare system: one for the "rich" meaning urban and suburban and one for the "poor, remote, and/or rural".
When people talk about socialized health care they rarely if ever talk about how to keep such a system from getting worse.
So when a rural hospital closes down, you can expect a higher death rate in the local population. Not to mention the economic impact of losing what is probably the highest paying employer around and all the fallout that comes from that.
In common parlance, "private equity acquisitions" refer to B2C companies rather than B2B companies where there was never of stigma of financialization to begin with.
It's possible you're right as I'm also speaking based off vibes, but my argument remains the same. Those who sell out for a quick payout would eventually fall into the category of "the current owner is unable to continue to run the business and cannot find a successor" when they hit retirement age and their kids would prefer easier/safer/higher general market returns.
Like I said, I wasn't talking about random B2B startups, and you're going to hit retire age someday. I don't understand what you're arguing against. If we lived in a place that is hostile to "private equity", the majority of the companies you listed never would have been started in the first place.
Here is a few examples of PE shops and their list of portfolio companies. Please name all of the companies that fit the criteria of "the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor"
It's not a matter of anecdotes. All you have to do is look at what PE is. It's financial engineering done to increase EBITDA for resale. There is nothing in the PE model incentivising improved outcomes for customers.
PE gets a bad rap and for very correct reasons (especially at the large cap where financial engineering is rampant). However, there are a ton of examples where PE does add value and the customer experience improves. However it's impossible for me to list them because your definition of customer experience improvement might be very different than mine. So this point is generally very moot unless we can all agree on a standard quality metric for "customer experience".
I use ASP for my pool cleaning and they referred me to their electric company (Mr Sparky). Both have been excellent services and I was able to receive a discount on Mr Sparky, because of the existing relationship with one. Seems like a win:win for everyone.
Yes which is the definition of something that is very subjective. What you deem as "good value for the money" may be very different than mine...hence my comment.
I've been using FSD lately on trips from CT to NYC and back (and the car performed well). My biggest fear has been debris (like shown in the video), or deer.
I am fairly confident the majority of my LinkedIn network are not experienced writers and don't know what em dash means. All make regular posts with em dashes in them. Their excessive use, combined with a certain presentation style, tells me it's ChatGPT. When I ask them they confirm it's ChatGPT.
I wasn't using em dash, but appreciate looking it what seems pedantry. It's about semantics after all and having the right syntax is key. So I realized I'd like to be more thorough and use em dashes, en dashes and hyphens correctly.
My point is that if you/we treat things "statically" we're missing the point. It's not just tech that's changing, it's society changing as a result of tech (always has been).
> It's not just tech that's changing, it's society changing as a result of tech (always has been).
True, and it goes both ways. As the cultural backlash to AI grows (see terms for it like Generative Slop, Bullshit Oracles, Regression Engines, etc) so too does people's desire to both identify and differentiate themselves from AI content and/or content that appears AI-esque.
So just know there is a significant subsection of the population that will clock such writing styles and will immediately dismiss and/or react negatively to your messages not on merit, but on "smell".
It is actually stupid to adjust to writing without m-dashes because one can easily replace all m-dashes to hyphens in chatGPT generated text. I predict that obsession with detecting chatGPT by m-dashes will be short-lived because it will be exploited as soon as it will have any real world consequences.
The upside is clear - vibe coding to test the market, get an MVP defined etc.
The downside is that sometimes non-technical business owners decide that something is good enough to launch with non-existent security guardrails, and then a bunch of unsuspecting people get their private data stolen (like happened recently with that dating app).
I know this is not the case here and the game is very cool, I was primarily replying to the comment about the new trend.
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