Is There a Lesson for Economies and Entrepreneurs to Learn from Bankruptcy? - page 2.

coolcoinz

legendary

Activity: 2814

Merit: 1192

Quote from: Davidvictorson on February 23, 2023, 10:51:34 AM

Why did they file for bankruptcy?
- rising interest rates
- high inflation
- Difficulty hiring
- ongoing war in Ukraine

None of the above!

FTX failed because it was a scam. They were stealing money from users, trading while intoxicated, donating people's money to politicians...
All the companies that held money with FTX, or had loans with them went bankrupt because they did not realize it was a scam, or did not bother to check.
Things like employment rates or war had nothing to do with it.

There's more than one lesson to be learned from this.
Don't trust, but verify.
Don't hold coins on exchanges.
Not your keys, not your coins.

Captain Corporate

hero member

Activity: 2156

Merit: 575

The biggest difference compared to old times is that there used to be a lot more companies who would buy other companies that did badly. So if you owned a company that had any potential but no money, someone with money would come to you and pay you a small sum, allowed you to walk away with "something" instead of nothing, and you would say "I sold my company" instead of "I bankrupted my company" thanks to that person. Then they would takeover, fire thousands, sell assets, and make a profit out of it, or they could manage it better if they want to but that rarely happened. These ruthless takeovers are not being done now, because why spend your money making chump change when you can make that much with just bank interest, FED increasing rates caused companies to bankrupt more frequently. Thats not the only reason, but a pretty big one.

so98nn

hero member

Activity: 2114

Merit: 603

Quote from: Davidvictorson on February 23, 2023, 10:51:34 AM

With all these things going on, I have been thinking to myself, "Is there an opportunity here?" Entrepreneurs have been characterized as people who can think outside the box. Steve Nickles, a law professor at Wake Forest University, has already said that "bankruptcies leave gaps for entrepreneurship." What do you think could be the opportunity is here for entrepreneurs?

Why not, there are many opportunities for learning what to do and what not when you become an entrepreneur. As a person of business one should always have back up plans A to Z so that one can tackle the situation like those mentioned in the OP. There are big companies and small companies as well who manage their business way advance with modern roadmaps. They always have plans on what to do if situation such as inflation / high interest rate occurs and to what level they can drop the revenue and still run the business in proper way possible.

With the marking of inflation they will pull out smart moves and still keep business operations running as it is. Any company that is under managed will reach the doors of bankruptcy but not the one that I mentioned above.

ChiBitCTy

legendary

Activity: 2282

Merit: 3014

This might be a little off topic, or outside the scope of what you're trying to discuss here but I felt it important to bring up. While in theory, and for many individuals as well as businesses, bankruptcy is a good thing, and can be quite helpful. However there's some big negatives to it. Scammers can easily open up LLC's, file for bankruptcy and simply repeat the process over and over. So, like many good things in life, it's taken advantage of far too often.

Welsh

staff

Activity: 3304

Merit: 4115

It's the initial money you need to start the majority of businesses, and when there's a economical crisis' going on, less people have that sort of money, and even if they did businesses usually take a lot of your time, and if you haven't got another job at the same time, you'll burn through that money real quick. Since, a lot of people don't pay themselves for the first year or so when starting a business. It entirely depends on the business obviously. If there's high demand for it, then you could get lucky.

However, with some of the examples given in the original post, exchanges aren't cheap to just make, and no entrepreneur will have the bank roll for that or the trust required either.

Coyster

legendary

Activity: 2184

Merit: 1302

Quote from: Davidvictorson on February 23, 2023, 10:51:34 AM

Why did they file for bankruptcy?
- rising interest rates
- high inflation
- Difficulty hiring
- ongoing war in Ukraine

All of these reasons (and many more) why many big companies filed for bankruptcy and folded up would still affect any entrepreneur (new or old) in the market, all these problems is what is prevalent today and isn't peculiar to any business model. But notwithstanding you can always say there is an opportunity for entrepreneurs to make the most of any situation, but it is not just as easy as saying it, starting a business can be pretty daunting, and the current global economic situation makes things even more difficult.

I'd not agree that now is the right time to start a business from scratch, prolly people who already have businesses prior can seek ways to implement additional features that could help generate more capital for the sustenance and growth of their business, but to throw yourself in the mix of it all considering what the economic situation is, and with the already extant competition, you might be knocked out of business pretty quickly.

Welsh

staff

Activity: 3304

Merit: 4115

There's always opportunities, for the right mind that is. However, to be able to launch something in the midst of a economical crisis, then it has to be something rather special, and make sure that it can withstand the different pressures right now. The thing is, running a business is actually extremely difficult at the best of times. Unless, you have a service or product that revolutionizes something or is just in the right time, and the right place; it'll be extremely difficult to do so.

Although, having said that; Bitcoin offers a unique situation where not all services are available at the moment, and therefore you can sort of learn from the mistakes of popular fiat companies, and potentially create a service based of the successful ones. Honestly, a trustworthy way of paying for your rent or mortgages would be appreciated, but then most users here would rather withdraw their Bitcoin from an exchange, and just pay via a direct debit into their mortgage/rent.

You're right though, there's an opportunity to be had not because of the current economical situation we find ourselves in, but the fact that Bitcoin still hasn't matured enough to have its commercial boom.

Davidvictorson

hero member

Activity: 1120

Merit: 887

Livecasino.io

According to this news article, there was an increase in the number of individuals and businesses who filed for bankruptcy by 20% in January from a year ago.

Some companies that have filed for bankruptcy are:
-Voyager Digital
- Revlon
- Three Arrows Capital
- Cineworld Group
- FTX Trading
- BlockFi
- Celsius Network

Why did they file for bankruptcy?
- rising interest rates
- high inflation
- Difficulty hiring
- ongoing war in Ukraine

With all these things going on, I have been thinking to myself, "Is there an opportunity here?" Entrepreneurs have been characterized as people who can think outside the box. Steve Nickles, a law professor at Wake Forest University, has already said that "bankruptcies leave gaps for entrepreneurship." What do you think could be the opportunity is here for entrepreneurs?

My References
1. www.vigourtimes.com/bankruptcies-climb-as-pandemic-aid-vanishes/
2. www.breakingnewsworlds.com/with-pandemic-aid-gone-more...ews-today-32431.html
3. www.bollyinside.com/news/business-news/when-epidem...ruptcy-filings-rise/
4. www.indiatimes.com/worth/news/crypto-firms-who-fil...nkruptcy-591270.html
5. www.thetimes.com.ng/2023/02/bankruptcies-rise-as-p...emic-aid-disappears/

Topic: Is There a Lesson for Economies and Entrepreneurs to Learn from Bankruptcy? - page 2. (Read 201 times)