Order of the Bath

The Bristol Merchant Venturers are now very similar to provincial branches of Lions or Rotary Club but perhaps on a slightly grander scale. But in their foundation they were an early example of the modern venture capitalists. Where the merchants invested in new trade routes and new world plantations, their modern counterparts invest in genome sequences and social networks. Their names are often spoken in the same breath as hedge fund managers and futures traders (now collectively called “Bankers”) and not mentioned in polite company but they can on occasion, almost seem to be charities. They put money into causes that would probably founder without them, of long term benefit to the country and even mankind—in everything it seems except intent. Their objective is, if the venture is successful, to take a very healthy profit just like their forebears. Many ventures will fail, the visionary inventors swept aside like the lost ships to the new world, but the occasional star apparently justifies the trail of debris and, of course, every one turns a blind eye to the slave gallies.

So when an initiative such as the prisoner rehabilitation scheme comes up it is very much a venture capitalist scheme. They cannot take a profit unless they reduce the re-offending rate of their “customers’ by a significant amount. I would hope there are some restrictions on how they select the clients, because the risk is that they are competing with the genuine charities such as this one founded in Bristol—both in drawing off funding and cherry picking the good candidates for reform.

The way venture capital takes its profit is not usually long term investment, they can’t wait that long. Once a company looks to become successful the usual course is to float it on the stock market if it is very good and has become a known name or, for smaller ventures, sell it to a bigger company who needs the technology or expertise. I can’t see that being possible for the prisoner scheme except perhaps to sell it back to the government when funds or the politics are more amenable.

Another reason that a successful fledgling company might be bought is to put it out of business, to squash the competition. Playing devil’s advocate, the rehabilitation scheme could be attractive to Crime Inc. as it would be drying up their recruitment field.

This entry was posted on 28 Sep 2010 at 09:39 by Rick and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.