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> I think the reasoning is that 2X vs 0.2X barely registers a difference for the VC. I thought this was worth calling out. This is more believable than the rep
by acjohnson55 11y ago
> I think the reasoning is that 2X vs 0.2X barely registers a difference for the VC.
I thought this was worth calling out. This is more believable than the reputation/pride argument for holding out. The business model is built around homeruns and busts. Middling exits are essentially busts.
- taneq 11y agoThat's insane, and highlights the unreal expectations around the VC investment model. A draw is not a huge win but it's still a draw, and that means you get to play again.
- ihaveajob 11y agoAFAIK, a typical fund is structured to close within 10 years. If the exit is, say, 6-7 years into the fund's life, there won't be material time to "play again" and still honor the agreement with the fund's limited partners (read: institutional investors) of getting their money back in time.