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>That's only a failure on the VC overall fund level, not the company or investor level. That investment is not a failure, even if the fund is. I put that last

• kbenson 10y ago
  > Nevertheless, the VC will frame it as a "failure" or "suboptimal outcome" Sure, but that's in the context of the fund, not the company. It's meant to be consumed by people dealing with the fund in some way. > If the VC knows ahead of time that investing $10m startup in will return just 1000% in 2 years, they'd rather ignore Trello and find "another Facebook" that can return 20000%+ No, any fund that knows they will get a 1000% return will definitely invest. The assumption will be that those dollars would have gone to one of the bad investments, because since the vast majority of dollars do, they're likely right. That investment will help the fund, because it doesn't it can be one large return, or a few slightly less large but still great returns. Not every fund that makes money does so because of a single great investment.