Anonymous Hearts WalMart and Debt

Here is a comment on an earlier post:

"Clearly many good businesses were built on debt, Walmart for one. Have more businesses failed because of debt than succeeded in spite of? Who knows? With businesses that require much startup capital, and where the genesis of the business is with the specialist and not the businessman it will rarely happen that the specialist could save for 10 years to finance the biz. Knowing this, angel investors and vcs trawl computer science labs at college, two give one example. Sure, many startup that took money would've been better off to self finance, but it doesn't prove anything about the wisdom of accepting investment."


Not all financing is debt.  You've shifted from building a business on debt to building a business with investors money.

WalMart is like every other large biz, a mix of good and bad: leveraging vendor financing into mass merchandising and lowering prices to widen access to goods and services.  Good.  Exploiting eminent domain to take private property and transfer it to themselves.  Bad.  No doubt if Walmart was forbidden some of the unethical practices, it would still be biggest, but not as big.


Gates had his own capital, so he and Allen could start Microsoft on savings.  Jobs and Wozniak had nothing, so they started Apple with savings.  They did build Apple with other peoples savings, so it is possible to grow biz without debt.  The venture capitalists offer savings to the specialist.


Now Enron, Countrywide, WAMU and many other businesses were built on debt.  Clarify which good ones were.

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