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>VCs need an exit to get a return. If not an IPO, then an acquisition. Unless of course the company becomes insanely profitable and can buy out their investors
by hkmurakami 11y ago
>VCs need an exit to get a return. If not an IPO, then an acquisition. Unless of course the company becomes insanely profitable and can buy out their investors at a nice multiple.
In addition, the exit must occur within the maturity term of the VC's fund.
- hamburglar 11y agoWhat happens at the maturity of the fund of the company is still chugging along but hasn't had a liquidity event?
- erdojo 11y agoBy that time, unless the company got profitable early, they've raised multiple rounds and the investors have a majority interest. Once they control the board, it's over. I read somewhere that Aaron Levie of Box.net only owns about 4% of his company. Choice runs out when money does.