Venture Capital

A few months ago, I was out in town, and I saw a car with nearly 20 bumper stickers on it. Each and every bumper sticker described something political, each and every one describing Governor Mitt Romney. They were all negative, demeaning, or poor in nature. But one sticker, in particular, stuck out to me. It said, “We don’t need a Venture Capitalist for President,” with a picture of Governor Romney on its left.

The driver clearly was not a fan of Governor Romney, but what else did this sticker say to me? This sticker indicated a clear lack of an understanding of the way an economy works, and pure hypocrisy. Wearing blue jeans and a t-shirt, she was wearing something corporate manufactured, and her Ford had come directly from Detroit. In spite of this, she’s an anti-capitalist (As she describes through her bumper stickers).

What is a Venture Capitalist, anyways? Who is a Venture Capitalist? A venture capitalist is a person who invests large sums into struggling or small companies with the goal of expanding the business. The venture capitalist then acts as a business consultant to the company, assisting with its management. Once the company reaches a certain value, the Venture Capitalist will typically sell his or her stake in that particular company, hoping for a large profit.

Venture Capital-backed businesses account for nearly 21% of all American revenues, and 11% of American workers work for Venture-backed businesses. Venture capital is a necessary componant of our economy, as this allows for American investment and economic expansion to occur. Facebook is venture-backed, as is the Weather Channel, Microsoft, medical device manufacturers, and more.

So why is this such a bad thing? This lady’s bumper sticker clearly indicated that she isn’t supportive of venture capitalists, which alludes to a total rejection of economic investment and expansion. She was driving a Ford, something corporate made and probably private equity or venture-backed. Ford even has a venture capital division. Yet, with her distaste of venture capitalism, she still drives her Ford.

The left tried to stick Governor Romney as a job-killing, heartless monster. The New York Times printed article after article about businesses that failed under the Governor, even though he had a 70% success rate in business. These articles described how select individuals had lost their jobs, their healthcare benefits, or something else, all while the Governor brought home millions.

If Governor Romney hadn’t saved that business, nobody would have a job. Nobody would have healthcare benefits, and nobody would have a pension. Romney encouraged the downsize of some businesses to a sustainable amount for the business, and if the business didn’t comply, they probably would have failed and closed shop. By freeing 10% of the company’s work force, he saved the other 90% of the company. By restructuring healthcare benefits, he made it possible for 100% of the employees to have access to benefits, otherwise, they would not have any at all.

As a venture capitalist, he’s done well. Staples, Sports Authority, and Brookstone have all thrived under his leadership. Governor Romney is an experienced business leader, and even President Bill Clinton has acknowledged this. So why would this lady driving the Ford still be so against a venture capitalist?

Venture capitalism and private equity drive the economy, so what is the distaste for it?

These are questions that I cannot answer, questions that are beyond me. I do not understand how Venture Capital is a horrible thing, as many on the left describe. I am writing this because I want to discover the meaning behind this distaste. What is it that causes people to have these bumper stickers on their cars?

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6 comments

  1. Don Solomon · · Reply

    The problem, Ryan, is that Romney, and Bain capital, were/are not simply benevolent venture capitalists, but rather vulture capitalist takeover artists. The majority of there business is to acquire the assets of a failing business on the cheap, usually even leveraged with the use of borrowed funds, and then selling those assets for a profit. All the while, whether the business succeeds or fails, they also accrue a sizable management fee.

    Occasionally, an acquisition is turned around. More often, an acquisition is raided, dismantled, and sold off, employees and their pensions, be damned.

  2. cole gagliano · · Reply

    I agree with you totally Ryan. Don, you don’t exactly know what you’re talking about, and besides, at least Romney had/has a business and has worked in many over his lifetime.

    What about Obama? Well, he’s never run a business, or started one. No, not even a lemenade stand! What does that tell you? It shows that something is better than nothing.

    Furtermore, ALL businesses have their downfalls, if Romney would have been in any business, the press would have found something wrong with it. People need to start looking at stuff with their own eyes, not the eyes of the left leaning media!

    Keep it up Ryan! I hope oneday you’ll be the leading new organization, or maybe even President of the US!

    1. Don Solomon · · Reply

      Give me a break, Cole! It is the young Mr. Kane who doesn’t know what he is talking about. Not only is his definition of “venture capitalism” wrong, so is his understanding of how Bain Capital conducted their business.

      While I am a conservative by nature, I recognize that the Republican party has its shortcomings. One of Mr. Kane’s is his propensity to prejudge and use generalizations which are by and large unfounded, and typical of a partisan mindset. Why you think someone who has closed his mind before he has even reached the age at which he can legally vote should be leading a news organization or rise to the office of POTUS leads me to believe you are equally inexperienced.

      1. cole gagliano · ·

        If everyone had their mind made up before the last day of the election, there wouldn’t be such a thing as liberals.

        You’re a Republican you say? For some reason I don’t think your to serious about it, we (Republicans) need to focus more on working together to win elections, instead of tearing each other down with untrue comments!

      2. cole gagliano · ·

        I bet all the directors of the main liberal media: msnbc, cbs, & cnn, all had their minds made up about what party they were going to support and what party they were going to tear down before they were old enough to vote!

        Like I said we need to focus more on working together, and not tear each other down.

        If Mr. Kane owned a News Orginization, the only difference between it and MSNBC would be that it wouldn’t lie about the Republicans, and it would point out all the bad things that the Democrats have done that the current media has covered up. (Benghazi, Fast & Furious Documents, Obama’s broken promise of: “Cut the debt in half” & others)

        Get the big picture yet?

  3. cole gagliano · · Reply

    I bet all the directors of the main liberal media: msnbc, cbs, & cnn, all had their minds made up about what party they were going to support and what party they were going to tear down before they were old enough to vote!

    Like I said we need to focus more on working together, and not tear each other down.

    If Mr. Kane owned a News Orginization, the only difference between it and MSNBC would be that it wouldn’t lie about the Republicans, and it would point out all the bad things that the Democrats have done that the current media has covered up. (Benghazi, Fast & Furious Documents, Obama’s broken promise of: “Cut the debt in half” & others)

    Get the big picture yet?

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