A business certainly can raise private capital, become profitable and remain privately owned. It would be like investing in a public stock because you expect th

A business certainly can raise private capital, become profitable and remain privately owned. It would be like investing in a public stock because you expect their dividend to grow. I think there is an assumption the VC agreement is structured without any sharing of operating profits, but I'm not sure why it has to be this way... anyone care to enlighten? If a profit sharing component was added to this model, you could significantly reduce investor risk, possibly offer better terms to founders and create an added incentive for finding businesses that have a monetizable product or service. Maybe YC is trying to avoid founders that bow to these constraints in favor of startups focusing purely on the product? There is nothing wrong with this, but it might just be delaying the inevitable; someone, somewhere will need to make a profit from it or the business will surely die.