Recently, I heard a discussion on how Romney made his fortunes. I read the Great Deformation but my understanding was clouded by the writer’s angst. I think I understand the mergers of highly leveraged companies and the subsequent gutting of the new entity but what I don’t understand is how the venture capitalists made so much money from dealing with the new companies even as they continued to fade into bankruptcy. I think I have also heard that the venture capitalists leveraged the merged companies even more even as they gutted them. How was this done and how did the venture capitalists walk away with so much money? Is it the position of Austrian economists that the venture capitalists during a loose money time, still served a market purpose? Also, would you be able to explain how the venture capitalism industry has worked in the last couple decades?
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