Name: Mike Joyce
Company: Advanced Industrial Products
What is the ideal objective of private equity in the American economy?
Ideally private equity would allow investors to reap a good return from a speculative investment. This assumes the company is successful.
How is private equity designed to meet that objective?
Unfortunately it is not.It is primarily financial engineering much akin to stockbrokers. Most venture capitalists make money either way (just like stockbrokers) because they hold out a dream -- not a business plan. Hence we live with a lot of speculation, not true working investment.
Please give examples of both how it has lived up to and failed to meet that objective.
Fortune's reviews of Bain show both successes and failures. If you don't have your own money tied up to make it successful and you have your return up front who cares. That is the bottom line.
NEXT: The venture capitalist
