Vulture capitalist

There are two common usages of the term vulture capitalist in an investment context.

The more established meaning is a venture capitalist who deprives the founders of a business of control, or, in extreme cases, virtually deprives them of the business.

The use of the term implies that the vulture capitalist is being unfair. In some case the accusation may be that the vulture capitalist used unfair or deceptive means to gain control, or, in the worst cases, stole ideas. Venture capitalists are obviously well positioned to do the latter.

The other relatively common usage is simply a bottom fishing investor who invests in the securities of companies that are close to insolvency, in the expectation of very high gains if they do recover.

Copyright Graeme Pietersz © 2005-2016