At the end of the day, VCs have to provide their limited partners with great returns, or they aren't going to be able to raise another fund.
Sentiment: NEGATIVE
Understand that VCs are simply a sophisticated form of financial investors who, in turn, need to satisfy their own investors.
I hear so many startups talking about how they can raise VC instead of questioning whether they need it in the first place.
VC firms are... responsible for the full life cycle of a company: they find it, help it grow, open up a Rolodex, and sell it.
Many entrepreneurs have shifted their focus to pursuing VC funding as a primary strategic priority instead of concentrating on generating value for their users. This is worrisome because raising capital alone is misleading as a benchmark for success.
One of the biggest mistakes entrepreneurs make is not understanding the relationship they have with their investors. At times, they confuse VCs with their friends.
Why do investors seem to care about 'billion dollar exits?' Historically, top venture funds have driven returns from their ownership in just a few companies in a given fund of many companies.
Venture funds get beaten up for not investing in important things. Okay, if you want venture funds to invest in important things, then don't penalize or make fun of them when those important things don't work.
The studios don't finance anymore, they get outside funds.
Great VCs do everything they can to make you successful. But just like your bank, credit card company, mortgage holder, etc. they are not confused where their long-term loyalty lies.
So many folks in the venture capital business are sheep that just want to follow the herd. They are momentum investors purchasing highly illiquid investments. That is a recipe for disaster.
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