Greed and Debt: The True Story of Mitt Romney and Bain Capital

[mobes23]

Private equity is not really the same as venture capital, Denny.

 

[Denny Crane]

Bain didn't have a venture capital arm in 1999 when Romney left.

They did have the PE division.

 

[Denny Crane]

http://www.baincapital.com/about-bain-capital

Bain Capital Milestones

1984 – Founding of Bain Capital

1996 – Founding of Brookside Capital Partners

1998 – Founding of Sankaty Advisors

2000 – Founding of Bain Capital Ventures

2004 – Founding of Absolute Return Capital Partners

 

[mobes23]

Exactly. I think it's inaccurate to describe any of what Romney accomplished at Bain as being in the venture capital world. I'm biased because that's the area where I work, but I pretty much love venture/startup companies...it's old school capitalism with a technology twist. True entrepreneurism. A person with an idea, sacrificing to build a company. It's good stuff. The American dream. Not to say Bain Capital hasn't possibly done some good in the world, but it has a different model than the VC model.

Private equity tends to be more about LBO type deals (though admittedly not always) and VCs are more about starting companies from scratch. They both have their place, but VCs a generally more likeable in what they do...although they too can be a pain in the ass.

As far as the firing CEO story goes, it can happen for sure, but it's never part of the deal when a financing closes. I've seen CEOs shown the door after the company has underperformed, but it takes awhile before that happens. Interestingly enough, Tom Baruch who is quoted in the story was on the board of one of my clients and the CEO was eventually shown the door by that board. In LBOs, it'll happen simultaneously with or soon after the deal closes. It's a different dynamic.