Comment by MarkusAllen
18 hours ago
Normal investor: "I'll give you money to grow your autism center. Take your time, focus on quality care."
Private equity: "I'll buy 500 autism centers using borrowed money. The centers will pay back that loan themselves. I'll also charge
them 'management fees' for my services. I need to sell these in 5 years for 3x profit, so cut staff, raise prices, extend waitlists.
Quality doesn't matter - the math does."
The special thing about PE firms: they use a playbook that prioritizes financial extraction over the actual service.
I made a dictionary of these terms because they're deliberately confusing: https://founderstowne.com/extraction-terms.html
Terms like "Roll-Up Strategy", "Debt Loading", and "Portfolio Optimization" sound sophisticated. They mean: buy many, make them pay
for it, cut costs, sell fast.
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