re: Let’s Talk about “Private Equity”

Appreciate the intelligent response.

3. Not sure how your assertion that a PE firm owns less than a founder is supporting anything against my positions. If you’re threading the needle that GP dollars invested = PE firm exposure and LP dollars invested =/= PE exposure, I fully disagree with that non-sensical partitioning. Almost every carry-structured deal has a de minimis of GP dollars invested, that’s the point! And PE firms remain legally and reputationally tied to their fiduciary stewardship of LP capital, so I don’t buy there’s an actual or effective difference in incentives as a result of which capital dollars are invested.

4. Simply incorrect here. There are examples across the tens of thousands of deals from history that supports any permutation, but as a theme, objective, and common practice, yes founders are sought to be involved and remain so, critically, through the next phase of ownership.

End-note: Not sure your reference of “LP” here. Do you mean “new institutional investor”, as was my reference? If so, yes they have adequate means to gain familiarity before committing to ownership and/or IPO participation, certainly no less than the PE sponsor had in its go-round from initial purchase

Why are we having a debate about PE when LSU isn't even involved with PE?

Really not following any of that rambling.

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Public markets just swallowed the SpaceX rug-pull IPO

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Ignore this post-IPO fact-pattern at your own loss: Twitter post on post-IPO performance from recent market and tech leaders

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Why are we having a debate about PE when LSU isn't even involved with PE?

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Well, if you’ve not been able to follow, everyone hates “PE” and thinks it’s terrible. This threads is correcting the record.

Also, my OP highlights how LSU leadership, Gov. Landry, and boosters sound like drunk mules fighting over turnips to proclaim what this hypothetical deal “is” and “is not”.

What it “is”, will be a financial mortgage on the LSU athletics department, and maybe the school and thus state budgets overall, simply to fund prior stupid fiscal dealings around irresponsible contracts, buyouts, and more irresponsible contracts.

What it “is not”, is any kind of “donation” that will leave the university unscathed

What it “is”, will be just as bad as the boogeyman nightmares of “PE” everyone is invoking breathlessly

Despite, as you correctly identify, it not actually coming from any actual “PE” source

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not what LPs signed up for.

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?

Any LPs that previously had “signed up” have the option to sell their stake at the event date of transfer of the invested company at issue from the legacy PE fund to the continuation vehicle. They would voluntarily *elect* to continue with the investment (i.e. roll their equity stake into the new SPV) logically only if they accepted the net returns outlook from the CV oppt’y.

Don’t you know how these deals work? Or at you furiously researching in real-time just to foment an argument?

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I didn’t expect all this sissy liberal talk from a Georgia fan. Must be from ATL.

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Clearly a retard. Is that the response you were hoping for?

But stands to reason someone illiterate in financial topics like, you, basic LSU poster, would think capitalism, investing, financial matters, etc. would think this is all “liberal” and not classic economic conservatism.

Love to know what you think about all the “liberal” “pussies” in every zip code in America living in larger houses than you

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I used to like LSU.

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Cool story nerd

Sorry for the run ons. Going stream of consciousness.

Yeah I think this is veering off course:

3. “I wouldn’t tell that to the founder”. What do you mean by “that”? I can’t find a claim I make that you’re asserting against. Is “that” supposed to mean “ethical alignment” or “economic alignment” perhaps? I can agree with you that economic exposure between GP and Founder wouldn’t be equivalent in all outcomes, but the counterfactual wasn’t anything I was asserting, nor does it inherently make “PE” “bad”, as the original source (ESPN article) repeatedly quoted from ignorant LSU reps

4. Between OK and TX, you must have some awareness to oil & gas. Show me a single investment where the PE firm bought out the founder and the founder was phased out.

End-note: I think you just missed what I was discussing. I’m talking about the subsequent owner. Whether that’s a corporation, the public markets, or a financial conglomerate. Invoking LP here in this context is incorrect and confuses understanding your point

3. No, I’m following you. My first reply was to your reply to someone else with the “pros” of PE. One of those pros you listed was alignment via saying sellers roll alongside with PE. This implies a partnership of some sort. While that’s a nice thought, I’m arguing that is not reality in most instances. And I used the example that happens (quite often lately) where a founder gets burned by the GP botching the execution plan. Within that point, I also showed that, in addition to hardly being an equal partnership, it is also unequal with respect to economic incentives. First, in virtually every case the GP, being an appendage of a PE firm, is a gargantuan institution, whereas the seller is usually just some operator that is now rich, but hardly can compare to the size of a PE firm. Therefore, you saying that a co-invest structure supports alignment is nonsense and more just a way to make everyone feel “fuzzy and warm.” Moreover, if you read LPAs, there are ways the GP commit can be made synthetically.

4. Name one? I don’t know, I don’t work in energy. But I can find a myriad of consumer, tech, and healthcare where my point very much stands.

No, I understood you. Again, call them LPs, bag holders, the primary market, the acquirers, whatever. Call them North American mules for all I care. The point wasn't the terminology I used while typing on the toilet. Someone that is going to come on here trying to flex should be able to grasp what I’m writing.