@scottalanmiller said in Is Real Estate Actually a Good Investment on Average?:
Look at SW as a key example. They are exactly a VC style firm from beginning to end. The founders put in "no" money, investors did. Those investors made bank when round A VC money came in. Those VCs made bank when round B VC money came in. Those investors made bank when round C VC money came in. Those investors made bank when IPO Investment Banking backers stepped in.
At this point, THOSE investors got burned because they overpaid for something that they had not properly evaluated. They then sold at a fire sale price to the current owners who paid pennies on the dollar for the remains of the company and now actually operate the business as part of a larger business strategy instead of attempting to run up its investment value.
Of the six or seven major parties involved in that process, all but one of them did really well. And all of them took risks, but the smarter (or luckier) ones made profits (on investments, never the business, the business was always losing money) and only very, very recently does the owner of the business also operate the business and now they are focused on making it profitable for the first time (and maybe they have or will after COVID subsides.)
so yes - you said basically what said only with a lot more detail.
The VCs put money, they found more VCs to put money in, eventually original people were able to take money out by selling shares at higher value - and the suckers at the end of the line are the ones who lost... so that's how VCs work - always looking for the suckers.