4 ms·

VCs don't get to take their profits until after the company exits. If they invest at a high valuation and then it IPOs at some lower price, there is no gain and

by pb 10y ago

VCs don't get to take their profits until after the company exits. If they invest at a high valuation and then it IPOs at some lower price, there is no gain and the VC gets zero carry.

rrdharan 10y ago
That's not true with liquidation preferences? The reported valuations in the press that come out after some random funding round are calculated with simple arithmetic but don't take into account the preferences...
kcanini 10y ago
VC still gets that sweet 2% management fee per year.