I never understood how venture investments worked even though I studied economic science. Let‘s say WeWork for example. If they got 17 billion as an investment and are now bankrupt. Are the owners still rich or broke and blacklisted for future investments idk

Question

I never understood how venture investments worked even though I studied economic science. Let‘s say WeWork for example. If they got 17 billion as an investment and are now bankrupt. Are the owners still rich or broke and blacklisted for future investments idk

In: 755

Answer 1

All the money these investors invest is extra money. If it all disappears they are still fabulously wealthy. They gamble with money that doesn’t mean anything on the chance that it will multiply exponentially.

I think because their ridiculous wealth was an accident they don’t mind as much losing a chunk of it. They think here’s a guy whose bullshit might take him to the top, just like me. So they invest in the bullshit.