this post was submitted on 18 Jul 2023
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105
The dirty little secret that could bring down Big Tech (www.businessinsider.com)
submitted 1 year ago* (last edited 1 year ago) by bboplifa to c/technology
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[โ€“] [email protected] 11 points 1 year ago (1 children)

Where Wansley and Weinstein break important new ground is on the other legal standard set by the Supreme Court: recoupment of losses. If Uber and WeWork and the rest of the unicorns are perpetual money losers, it sounds like the standard isn't met. But Wansley and Weinstein point out that it can be โ€” even if the companies never earn a dime and even if everyone who invests in the companies, post-IPO, loses their bets. That's because the venture capitalists who seeded the company do profit from the predatory pricing. They get in, get a hefty return on their investment, and get out before the whole scheme collapses.

Yep. The venture capitalists found a loophole.