No the title isn't clickbait or exaggeration. "But how can you say that when most businesses rely on investors to even exist tho?!?!" Well keep reading and I'll explain exactly that!
To avoid having this be a college essay, I'll focus just on the main type of investor, the one that is only investing because he expects to get more money back then he put in. Yes I know there are other types, like activist investors and others who attempt hostile takeovers for whatever reason (when someone buys up over 50% of a stock in an attempt to gain control of a company, pretty much what Musk was doing to Twitter before the board agreed to sell to him), and there are even "angel investors" who practically give their money away without expecting a return just because they support the creator or product that much (if you can get these, consider yourself lucky). However these are tiny minorities.
The vast majority of investors just want to make money. They often don't like or even understand the companies they are investing in, they just follow market expert guidance. "Experts say this line will go up fast, so I'll put my money here". And that's where the problems emerge.
Where investors are involved, it's not enough to just be profitable. They want to make as much money as possible as fast as possible. Say you invested money in 2 companies, company A doubles your money, while company B gives you back 10x that amount. Wouldn't you move your investments to company B if your goal was just to make money? Investors always consider these opportunity costs, and most of the time only in the short term.
THIS is why we constantly see profitable companies/projects fail. If you own your own business and don't have investors to answer to, you can focus on sustainability. It doesn't matter if your profits aren't constantly growing, as long as the business is sustainable and pays your bills. But investors didn't put their money in your company to have it maintain its current value. They always want MORE. Every quarter you'll be compared to your competitors. "Call of Duty is making all this money, why can't you make that much money? I would have been better off investing in Activision. Either you make more money next quarter, or I'll sell my stock and do just that!"
And it's this quarter to quarter mentality that sinks most companies. In order to keep their investors happy and avoid losing most of their money next quarter, companies cannibalize themselves and sacrifice long term profits to achieve that short term gain and look good for their investors. Or they outright lie about how profitable they expect to be in the future based on their current plans. There's only so far companies can take this before they collapse. Look at Disney for a great example of this.
Another good example is Unity. They knew their recent licensing decisions wouldn't go over well (why else would the executives dump their stocks before said announcement?) but they did it anyway because they became a public company 3 years ago and now have investors to answer to. The investors don't care if this will destroy the company long term, they couldn't care less about the long term success of the company. They can just sell their stocks and wipe their hands of it, not their problem. Same with the executives. Unlike with partnerships or sole proprietorships, their personal fortunes aren't tied to the success of the company. They can run the company into the ground, extract all the wealth from it, then deploy their golden parachute and leave the workers holding the bag.
Starting to see why we have a problem now? Everyone involved at the highest levels of public corporations is only in it to make a quick buck, and they don't personally suffer any consequences if they destroy the company in the process. These locusts go company to company, extracting all the value they have, and moving on to the next target.
Though that's not to say there aren't people who benefit from this. Going back to the earlier "you need investors" comment, I know of more than a few career entrepreneurs. Their main skill is sucking up to potential investors, getting tons of money to build their startup, selling the startup to a big corporation, and then walking away with big wads of cash while the employees get laid off and the product they were making gets butchered and corporatized.
Yes, if you're not independently wealthy you do need investors for large, expensive projects. But you CAN do them without investors, just have to start small. All the big corporations started out as small shops and built their way up from there. This path takes way longer, and you might not live to see it through, but what's the alternative? I guess if you're only interested in making as much money as possible, by all means go the investor route. But if you actually care about the product you are making and the community you are making it for, you'd be better off starting small and staying independent.
And that's why I have no investors. All I have is customers. When it comes to me getting money, nobody is competing with the customers. I don't have investors throwing more money at me then my customers do in order to sway me to their side. I can give customers what they want because I don't have another true master I'm actually serving.
Keep that in mind when looking for companies/creators to support. Make sure you always know who they REALLY answer to! Cause if it's investors, you know their ultimate fate.
