1. Investors who want to invest in companies with a growth story and want the company to grow bigger and be “successful” enough to exit either via an acquisition or the public market. But often times these days, just to pawn off to the greater fool.
2. Investors who want to go in and make the company worse and do enough value extraction for short term gains. The canonical case is when a restaurant chain owns its own real estate. They split off the restaurant from the underlying real estate and make the restaurant pay rent that goes up. The restaurant flounders and the real estate holdings increase in value.
And another strategy is to acquire companies in your vertical, roll them all up, fire redundant staff and integrate systems and then exit. Of course you enshitify the smaller once independent mom and pop systems in the process.
I'm going to paraphrase Matt Levine here -- the central trick of bankers is to divide debt into tranches of claims of different seniority, with different rates of return. Debt is a way to borrow money from investors where they actually have a generally low rate of return specified and have a senior claim on being paid back in the case of insolvency. Stocks are a way to borrow money for investors where they get basically _nothing_ in the case of insolvency, but they expect a higher return from either dividends or stock buy backs, or just from company growth. Different investors have different goals in terms of risk/reward for what they want out of a company they invest in, and providing investors more options unlocks more opportunities to raise money.
Convertible debt is very different: if you do the same (simplistic) analysis as in the article, it behaves almost like the equity example, not the debt one.
As a shareholder, thanks for going the convertible debt route! I like the fact that the company became profitable but the call option component of the previous round of "senior convertible notes" expired out of the money.
Comparatively speaking, I don't know why investors won't touch DOCN with a 10-foot pole, but I will gleefully reap my returns from dividends and stock buybacks when DOCN laps AWS in 20 years with better services maintained by better engineering staff.
It stems from the relatively low capital requirements of tech companies relative to other industries (pre-LLM). Now that this factor has changed we see them rapidly adopting debt financing for their capital intensive LLM projects.
> stems from the relatively low capital requirements of tech companies relative to other industries (pre-LLM)
Not really. Tech, including low fixed-cost software, has been tremendously capital intensive for decades. Early-stage start-ups lack the cash flows to fund debt. But post-Series B companies raising equity are generally doing so for idiosyncratic reasons, e.g. capital sponsors being concentrated in equity for historical reasons, valuation escalators and capital denial to competitors.
I don't think you understand what capital intensive means. Many tech companies are started out of their founders apartments for essentially 0 startup cost and from here the only serious costs are salaries and AWS. There's a reason that tech founders get so much richer than founders in other industries and that reason is because the minimal capital requirements allow them to sell off so much less of the company before reaching massive scale.
> don't think you understand what capital intensive means
I may have missed something in my career on Wall Street, as a founder and in VC.
(Being wrong is fine. Being confidently wrong is dumb.)
> Many tech companies are started out of their founders apartments for essentially 0 startup cost
You’re mixing up fixed costs and capital. Both fixed and operating costs consume capital. (We call the latter working capital.)
(You may also be mixing up PP&E and capital.)
> a reason that tech founders get so much richer than founders in other industries and that reason is because the minimal capital requirements allow them to sell off so much less of the company before reaching massive scale
This is wrong. Obviously wrong.
Tech founders get richer because their companies get bigger. Apple, Tesla, Google and Saudi Aramco have massively different capital requirements. Their owners (and founders/founding lineages) are in the same ballpark.
Similarly, most family businesses never sell equity until they sell the business. And most tech founders don’t have a majority of equity after a couple rounds.
Neither a billion isn't small no matter how vague you want to make it, yet, we label startups with this valuation as unicorns. So where is the boundary? 10 billions? 100? 1000?
Yeah, your local friendly police officer isn't gonna do that.
They're gonna pay Anduril, Palantir, and a whole host of other business or consulting firms a ton of your money to do that.
The criticism that "it's technically too challenging for the police department therefore its sci-fi" is extremely silly given that the current article literally is about private companies that are building surveillance networks that they will then sell to the police.
It's a lot cheaper to just bust the door down, toss in a bunch of flash bangs and light up anyone who doesn't have their hands raised. Maybe they'll just send an armed robot in first if there's a specific threat involved.
Most robot vacuums (at least the ones that use LiDAR, which seems to be the majority) can only capture a very rudimentary plan of your house, that being a 2D image taken at an elevation of ~10cm or so. It will also be obstructed by any large objects, and there's no easy way of telling them apart from walls.
Your government probably knows your floor plan (though, I don't think they tend to be publicly accessible). Either way though, neither of these methods are anywhere near enough to do what was shown off in those Wi-Fi tracking demos. Here's hoping the tech doesn't get a lot better or has a series of unexpected breakthroughs.
This wasn't a non issue. You touched the phone in the wrong places and you would drop off an existing call.
Most people solved this by indeed not "holding it wrong" or getting cases (I don't know if the cases worked, but there was a whole industry built around advertising cases that solved this problem).
1. I seriously doubt Apple was accidentally displaying more bars on the phone. If it was a "bars" issue then it was almost certainly done deliberately to make the iPhone reception look better than what it was.
2. It wasn't just bars. I had this phone and you would literally drop off calls by holding the phone differently when you hadn't done anything else. There was a genuine problem with the phone that I don't think was ever resolved other than people getting used to holding the phone differently like Steve Jobs told us to.
I lost my iPhone and switched to a hand me down from my parents which was a generation older and the service was significantly better.
Being okay is a lot different from maintaining academic, innovative, and cultural dominance which provides a standard of living many have grown used to.
I don't think that website implies what you're thinking. The only significant thing that happened in 1971 is that Nixon suspended the convertibility of the dollar into gold, giving the US leeway to run unlimited deficits, paying for imports with paper.
Now, America wants to reduce its debt and curb industrial powers like the EU, Japan, China, etc. but it doesn't want to give up its exorbitant privilege that got it into the debt whole in the first place.
No, your point doesn't stand at all. It's completely baseless. You took a detailed resource referencing America's departure from a gold standard and you're twisting it to support your pet immigration policy.
Now, if you want to limit non-European immigration, it's a personal opinion and you have a right to it, but you can't make a blanket statement that, "everything worked better," or misinterpret data to say what you want.
Don't pretend you're being data-driven when you've made up your mind and now you're trying to torture the data into saying what you want.
What metrics are you measuring by?
So, while it seemed like you were trying to argue logically, it appears your argument is: I don't like non-Europeans. And you're trying to massage the data into showing your opinion is data-driven because it can't stand on its own merit.
Student enrollment in the US is declining and the big problem for colleges the past few years has been a worry about not having enough students. So it's not clear why US students were struggling to get a college spot.
And if you mean them getting spots in the more prestigious institutions, well, it's not clear whether that will even happen (the few thousand international students admitted to the top universities are not the ones that are likely to decline their acceptance letters), but even if it did, well, those universities are simply not as prestigious anymore.
Attracting the best talent from anywhere in the world is a huge part of what created their prestige, and that's even before we get to how they're losing funding, and professors and researchers to other countries.
Which is a completely unrelated effort from the free money you're getting from abroad.
Unless governments institute policies that require them to "tighten their belts" they won't tighten their belts by cutting their own pay. They'll tighten belts by cutting out the least paying students, and scholarships, instead.
If this does push governments to get universities to tighten their belts, then why not have governments make them do that anyways without losing a massive chunk of export earnings, and a form of export earnings which has demonstrated positive effects many times greater than the dollars they bring in.
The only difference with public companies is we actually have data about their finances.
The private companies are doing it all under wraps.