Renewables
With the recent revival of one of Boston’s Hall of Fame financiers, I checked into the SEC’s FAQ for the following:
“What is a Ponzi scheme?
A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.”
So is it a Ponzi scheme if the risks are stacked against the r ‘later investors’ but in the fine print? The most reasonable protest to Rick Perry’s claim on Social Security is that those later ‘in line’ have to be duped.
This isn’t really a rant. There’s a point here (I think). To wit:
I attended a Cleantech Venture Capital Forum recently at a well known Eastern Business School. Representatives from four leading VC firms, with a history of CleanTech investing (not always successful), moderated by a former VC-turned CleanTech I-banker, discussed the fit, and mist-fit, of the field with VC business models. During the presentation, after highlighting the volatile state of VC industry returns and funds flows, one of the panelists described the Venture Capital business model (paraphrased) in ‘partner terms’:
“Our objective is to identify technologies or concepts that might be disruptive, but, more to the point, have the potential to become bubbles, invest early, and either garner or distribute gains in to the bubble environment, to later stage investors.”
Well, I think that’s how it played out for internet 1.0, cleantech, and synthetic biology, and seems poised to work for Medicare, Social Security, etc (your example here)?