Investment Banking University is the world's only university dedicated to higher learning in investment banking.
Don’t miss anything. Follow Us.
CALL +1 920 264 3054

Capitalism as a Perpetuity Game

In order to build benefit streams (wealth), individuals engage in the perpetuity game by building or buying perpetuities. In order to build a perpetuity, a single benefit stream must be created first and then that benefit stream is to be de-risked. After de-risking that benefit stream and continuing to grow it, the individual may build another benefit stream that is synergistic with the initial benefit stream so that capabilities and functionality may be taken advantage of.


Due to existing capital that is accumulated desiring passive returns from already built perpetuities, a marketplace for perpetuities emerges where the benefit stream itself is valued in a multiple capacity meaning that it is worth more than the work put into the creation of it. This marketplace means that there are those that seek to enter and exit perpetuities in order to generate passive benefit streams for themselves and thus the perpetuity game emerges. This is the essence of the capitalist system that we live in whether you are aware of it or not.


Within the perpetuity game, there are different sides of the perpetuity that emerge including the build side, sell side and buy side that have different players within each category with various hurdle goals.


On the build side, the perpetuity scientist seeks to build a benefit stream with the largest multiple in order to then exit the perpetuity. This means getting the benefit stream to qualify for the most liquid marketplace by going from a private perpetuity to a public perpetuity (“going public”). These players include entrepreneurs and corporations.


On the sell side, the perpetuity scientist seeks to aid those that have already built perpetuities in exiting them at a strong multiple and take a fee for doing so. These players include investment bankers and Wall Street.


Finally, on the buy side, the perpetuity scientist utilizes an existing or borrowed pool of capital to enter and exit perpetuities to create a passive benefit stream for themselves at some hurdle goal (“hurdle rate” or IRR). By entering perpetuities, operating them and then exiting them five to seven years later, the financial or strategic buyer is able to generate the new benefit stream and the rate of return in relation to the capital invested.

Post a Comment

User registration

Reset password