Not all PE problems are existential; they will be outcompeted.
What keeps a newly graduated Veterinarian from opening her own clinic and undercutting the PE competition? With no massive loans on her books, she can profitably offer lower prices than PE can. She may even drive the local PE clinic out of business.
First, opening a clinic requires some serious money. Then, if the new clinic gets traction, PE can make a very good offer for a buyout and the owner would have to be stupid or very stubborn to refuse. Most big companies these days just buy up competition. Good for the owners but bad for the customers.
Another thing which I've seen personally is that in general getting from 0 to 1 required HEROIC effort to the point that it requires a personality type.
How many veterinarians got into the game to become relentless, driven, scrappy and indomitable business owners vs because they love furry things and helping?
> With no massive loans on her books, she can profitably offer lower prices than PE can
Depends entirely on fixed vs variable costs. Rollups (which are very common now) work mainly because most "mom and pop" businesses can easily be "unlocked" by pooling the treasury, HR, accounting, commercial banking, supplier negotiations etc.
"Lower your prices to compete with massive sources of capital" Great idea.
How is a new graduate supposed to start a business without a loan?
People had no problem starting clinics in the past and they probably could today if they really wanted to, but there is little incentive to for the past few decades while the stock market has been booming. Why spend 80 hours a week struggling to run your own clinic and paying off loans when you can work 40 hours a week working for somebody else's clinic and invest your savings in the stock market?
Find an investor.
Could a veterinary business not be bootstrapped?
Assuming you had $$$ for some supplies but couldn't afford to lease a commercial building, you could provide small mammal services from your vehicle, driving to people's homes to give vaccinations and well care.
Being mobile would also allow you to serve a larger market than a fixed clinic; you could serve a couple small towns on Monday, a couple others on Tuesday, and server a larger metro on the weekends.
Once you're consistently profiting $$$$/day you'll be able to start saving for the equipment you'll need for a commercial lease somewhere because you have both the cash, cash flow, a loyal customer base, and critically, a good sense of where a good location would be to serve them from.
Sure, that sounds plausible. I'm not saying you need an enormous amount of money, but for this scenario you need supplies, car payments, gas, probably some kind of licensing fee, insurance, some kind of advertising, and a few months of rent and living expenses until you start making a profit. Maybe like $10,000, plus more as a safety net in case it doesn't work out and you need to find a job?
Even if they are lucky enough to have no debt, I don't think the average graduate has $10,000+ in the bank to spend. I have never started a business so I honestly have no idea how hard it is to get a small business loan for something like this, maybe it's easy, but even so it's certainly risky.
Do you know how much it costs to start a business, and how much the average well-off American has saved?
this is a peak HN comment in terms of cluelessness about the realities of how the world works if you're an ordinary person.
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who are these grads graduating without massive loans hanging over their heads?
> With no massive loans on her books,
Except every newly-graduated veterinarian does have a massive loan on their books, in the form of student loans. And even if she didn't, where does the startup capital for her clinic come from? Whether in human or animal medicine, starting your own practice--especially as a new grad--is usually the course of action with the highest-risk-to-lowest-pay ratio.
Yet there is no evidence of this happening in any industry or area where PE has become the dominant player. Why not? What you’re saying is nice economic theory but it’s clearly not happening.
Because the pain is bearable and not too much.
If it becomes too much, things actually happen.
(This is the dark side of financialization, as it can be used to maximize human misery.)