Comment by tyre
13 hours ago
One would presume that the founder is investing their money into something, probably equities, that is an investment in industry. They could be either selling those equities for a loan here or taking a loan against those equities to loan to GoPro (if the cost of capital is lower for them than GoPro, which seems plausible.)
I generally agree with your point about value extraction vs. re-investment.
Equities aren't investment in industry except when there's an IPO or SPO. The rest of the time, it's zero-sum.
What you just said makes no sense. How can equities come into existence except via an IPO or similar mechanism?
Equities are literally investments in business. Equity is a line in the balance sheet for every corporation.