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What happens if they don't deploy all that capital?
by ben_jones 10y ago
What happens if they don't deploy all that capital?
- moritzplassnig 10y agoThen they failed. In the same way as a startup that raised $x in VC and after burning through 50% decided that it didn't work and give the money back would be considered as failed. Investors invest because they expect a certain return. Doesn't matter if it's VCs investing in startups or LPs investing in VCs. In case you're wondering if they would have to give the money back: Technically, they don't have all the money. VCs 'request' money over time from their LPs (they do 'capital calls').