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Mitt's message on Bain

May 29, 2012: 3:00 PM ET

Mitt Romney comes clean on Bain Capital.

FORTUNE -- I'm (not really) Mitt Romney, and I approved this message.

Ever since I began running for political office in 1994, opponents have tried to use my experiences at Bain Capital against me. The latest to do so is President Obama, whose recent advertisements compared Bain to a brood of vampires. Hurtful stuff, particularly since we Romneys are all Team Jacob (well, except for Tagg).

So I wanted to explain what we did, and didn't do, at Bain Capital. It's not really something I like talking about -- you know, outside of sweeping generalizations -- but voters deserve accurate information do that they can make an informed decision.

1. Bain Capital did not begin as a private equity firm. Seriously, it wasn't our intention. Instead, the plan to was invest in small, startup businesses and help them grow. Real job creation stuff. That's why we did a deal like Staples, which only had one store at the time.

But here's the thing about venture capital: It's hard. Really, really hard. Right now, for example, the average VC fund has actually lost money over the past decade. So we kept doing some venture investing, but mostly transitioned into what's now known as private equity (at the time, we called it leveraged buyouts). Basically buying mature businesses, largely by using bank loans. And the best part is that the loans actually are taken out by the companies, rather than by the private equity firms. It would be like financing another stimulus by borrowing from the Chinese, but forcing the Chinese to repay the debt.

Actually, the best part may be that private equity funds are usually larger than venture capital funds. That means more guaranteed take-home each year (PE funds charge fees). So when you ask why did I really become a private equity investor, it's basically because I could make more money by taking less risk. How is that not an American value?

2. Bain Capital did not make money by bankrupting companies. Come on, this is just silly. Like saying Seamus didn't love riding in that crate, when you weren't there. Remember, we financed most of our deals with bank loans. What bank is going to give us another loan if our official strategy is to make the issuer insolvent?

Here's where I think people get confused: Private equity's general investment strategy is to buy low and sell high. Not too different from any other asset class. And if you look at Bain's historical performance, that's how we made most of our money.

Yes, we also made some money on deals that went south, by preemptively taking out new bank loans in the company's name, and then using them to pay ourselves a dividend. But we did it when the companies were fine, so we didn't make money by bankrupting companies. We made money from companies that later went bankrupt. See the difference?

Some people say the extra debt drove the companies into Chapter 11, but no one knows for sure. Kind of like the whole man-made global warming thing. Sure it's possible, but you can't prove it. And if you find dozens of experts who say it's so, I'll find one who says it isn't.

3. We didn't create 100,000 jobs. Actually, we might have. Honestly have no idea, since Bain didn't track those sorts of things. Our job was to make money for our investors. Period. But saying that I know how to create jobs worked better in focus groups, and then that 100,000 figure just kind of spurted out there one day. Probably should have walked it back but, at this point, I'm pot-committed.

4. We didn't keep all the profits. Only 30 cents of every dollar Bain made went to me and my partners. The rest went to our investors, which included college endowments, charitable foundations and corporate retirement plans. You know, studying people, down on their luck people and working people.

It also would have included a slew of public pension plans, except: (a) Such systems weren't investing much in private equity back then, and (b) Bain's above-market fees kept most of them at bay.

That sounds more like Robin Hood than Dracula to me. Or maybe Batman -- fabulously wealthy, but helping others. Yes, I'm Batman.

5. Private equity has changed since I left. In 1994, Ted Kennedy used Bain to beat the heck out of me. This time around, however, even some of President Obama's own surrogates are in my corner, arguing that private equity shouldn't be on trial during this campaign.

My record remains exactly the same, but private equity has matured in the 13 years since I retired. It's larger, which means its practitioners can make more political donations. It now has its own lobbying organization (which, ironically, Bain is no longer a member of). Most state pension funds are now private equity investors, which means shared interests and relationships. And the actual investment strategies have evolved, with firms using less debt and often focusing more on operational improvements. In my day, for example, few firms had ex-CEOs on staff, for advice and to pinch-hit on an interim basis. Now they're ubiquitous.

So when someone says that it's wrong to criticize private equity, they're not really talking about the same private equity I was involved with. But I'll take it, of course, and hope that the differences have been lost to the sands of time.

And if you really want me to talk more about the good old days, beyond this message, don't worry: I'll be more than willing to do so in the future. How does November 7 work for you?

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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