The process you describe above is highly vulnerable as Ponzi scheme. The goal would be to raise total revenues, to paint a certain financial picture to meet targets for cashing out before the high debt load and interest payments sink the ship.
As soon as there is insufficient cashflow for several consecutive periods, the whole thing comes crashing down. This is a strategy for cashing out, rather than building a long term sustainable book of companies for steady, organic growth which has the cash to payout dividends and reward loyal investors.
> The process you describe above is highly vulnerable as Ponzi scheme. The goal would be to raise total revenues, to paint a certain financial picture to meet targets for cashing out before the high debt load and interest payments sink the ship.
You have just described almost every modern VC backed company….
As soon as there is insufficient cashflow for several consecutive periods, the whole thing comes crashing down. This is a strategy for cashing out, rather than building a long term sustainable book of companies for steady, organic growth which has the cash to payout dividends and reward loyal investors.