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Bain Often Couldn't Lose With Buyouts (Romney spent much of his career with leveraged buyouts not VC
Boston Globe ^ | 1/14/2012 | Beth Healy

Posted on 01/16/2012 12:55:17 PM PST by Laissez-faire capitalist

Mitt Romney has long called himself a venture capitalist, experience he says helps him understand the economy better than other candidates for president. But he spent much more of his career in leveraged buyouts than in the investments in start-up companies known as venture capital...

(Excerpt) Read more at ...

TOPICS: Business/Economy; Extended News; News/Current Events; Politics/Elections; US: Florida; US: South Carolina
KEYWORDS: bain; elections; gingrich; leveragedbuyouts; notventurecapitalist; rinocapitalism; romney; romneytruthfile; santorum
Wall Street Journal Repeat After Me: Bain Capital Is Not A VC Firm

Washington Post Mitt Romney and 100,000 jobs: an untenable figure

Big Government How Did Romney's 10,000 jobs become 100,000

The 100,000 jobs tally does not include job losses from other companies with which Bain Capital was involved and are based on current employment figures, not the period when Romney worked at Bain.

Sad that on this subject there is precious little conservative media news. Much of the conservative media has rallied around RINO Romney and RINO capitalism, which isn't the same as free enterprise.

RINO Capitalism: taxpayer-funded corporate welfare, subsidies, bailouts, etc.

Los Angeles Times Mitt Romney No Stranger To Tax Breaks, Subsidies

Reuters Romney's Steel Skeleton In Bains Closet

More where that came from...

Should have went with Gingrich or Santorum...

1 posted on 01/16/2012 12:55:28 PM PST by Laissez-faire capitalist
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To: Laissez-faire capitalist

Hey, stop being opposed to corporate welfare and cronyism, you’re undermining capitalism! </sarc>

2 posted on 01/16/2012 1:02:14 PM PST by Utmost Certainty (Our Enemy, the State | Gingrich 2012)
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To: Laissez-faire capitalist

Another post from a Romneybot looking to deflect things away from Romneycare and his abortion flip flopping. Am I wrong?

3 posted on 01/16/2012 1:28:47 PM PST by impimp
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To: impimp

Yes, you’re wrong. This just catches Romney in another lie/half-truth. Bain was not a venture capital firm overall, although it did do some of this in its early years (most notably, investing in Staples). But most of its business was leveraged buy-outs, which means you borrow the money, usually using worthless collateral or none at all, and buy another business and either resell it as fast as possible or take its assets and then get rid of it. A buy-out firm is not even buying something to restructure it; it’s buying it to get the fastest possible cash and then move on. It’s kind of like flipping a house or condo but on a much bigger scale.

This is not illegal but it’s sure a long way from the picture Romney was trying to give.

4 posted on 01/16/2012 1:41:32 PM PST by livius
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To: Laissez-faire capitalist

This a a really poor attemtp by the Globe.
It says Romeny was more of a “ leveraged buyout “ person than a VC>. Trying to say he bought companies to licuidate them
But in the one abd only example it gives, Accuride, he bought it cheap. sold it high and in fact it is still in business.
If only media would have paid a smidgen of the same attention to the reality of 0dumbo we would not be in this shape.
But for anyone trying to make Bain a negative they need to wise up and find something else

5 posted on 01/16/2012 1:57:33 PM PST by RWGinger (Simpl)
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To: livius

Why do you hate capitalism??? /sarc

6 posted on 01/16/2012 1:57:33 PM PST by Mangia E Statti Zitto
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To: livius

NO -I am right. You are a Romneybot and you don’t know it. The effect of your post/sentiment is the same - you are deflecting away from his weaknesses toward his strength.

7 posted on 01/16/2012 2:03:50 PM PST by impimp
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To: RWGinger

Bain was in no way a VC.

8 posted on 01/16/2012 2:05:43 PM PST by Minus_The_Bear
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To: Minus_The_Bear

What do you call Staples? certainly a textbook defintion of venture captialist investment .

9 posted on 01/16/2012 2:14:19 PM PST by RWGinger (Simpl)
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To: Laissez-faire capitalist
Amen, Romney was flat wrong and evil on this.

When poor people covet using government they call it socialism.

When the wealthy covet through lawyers, loopholes and leveraged buyouts people get confused. It is the same sin... violating the law of the harvest by coveting what your neighbor has.

10 posted on 01/16/2012 2:22:12 PM PST by SENTINEL (Romney is to Conservatism what Mormonism is to Christianity.)
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To: Laissez-faire capitalist

I am still making up my mind on Romney. I know this, if he is the Republican candidate against Obama, I will definitely vote for him. Likewise, every American concerned about the economy should also vote for Romney.

I was an executive at a company which was twice bought out by venture capital buy out firms. The first time was a huge success for everyone including employees. The second time ultimately failed due to the crash in the real estate market, the economy in general, and yes, excessive debt. The debt was partly caused by the excessive price paid for the company in a very competitive auction style process. In other words, it would have been better if the successful bidder had negotiated a better deal to keep the ultimate debt down. However, very quickly after purchasing the company, the VC buyers were able to sell public debt to help finance their purchase, and within two more years there was a public stock offering to finance expansion. The VC buyers were active board members, did not take unreasonable fees, and at first oversaw growth in sales and employment. The ultimate exit stategy for the VC buyers would have been to sell their public shares in a secondary offering somewhere down the line.

Finally, due to the real estate market crash, the declining overall economy, and the resultant inability to service debt, the company went bankrupt. This falls under the category of “you win some, you lose some.” The VC buyers were guilty of NO wrong doing. The initial plan would have benefitted all parties, except that events got in the way. Ultimately, the VC buyers lost their entire net investment which, of course, did not help anybody. Like I said, “you win some and you lose some.”

In summary, my general impression is that the VC buyers did nothing wrong and their overall plan would have provided great benefits to all parties, including themselves, if it had worked out.

Romney’s role as the head of a VC firm does not cause me to view him negatively in any way. Some of their investments succeeded and some did not. Stakeholders in the successful companies benefitted. Stakeholders in the failed firms did not benefit obviously, but there is really no way of knowing what would have happened to these companies without the VC involvement. In all liklihood, the chances for success for these companies was improved at least temporarily. In private business each company must make a return on investment or it will not continue. Compare this to government where taxes can be increased, inflation can be created, or deficit spending can be deployed to create employment even for dubious purposes. A President who actually understands business would be novel idea and couldn’t be worse than the raw rookie holding power now.

11 posted on 01/16/2012 2:27:57 PM PST by Sam Clements
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