Venture capital is based on distinct funds which are raised one at a time. Each pool of money is distinct from the others that a VC might control. They need to

Venture capital is based on distinct funds which are raised one at a time. Each pool of money is distinct from the others that a VC might control. They need to report on them individually and they need to pay out of them individually. The key is that each fund has a fixed lifetime, often something like 7-10 years. At the end of the lifetime the final value of the fund is returned to the investors. It's hard to return cash you don't have -- and worse to return a reduction in value to investors (since you'll find it harder to raise next time). So as a practical necessity, at some point, there needs to be a big liquidity event for one or more investments made out of the fund. That could be an IPO or a purchase by another company. Because of the highly speculative nature of VC, almost all of the companies supported out of a fund will fail. These will essentially be ignored. Some few of them will be bought at a price that covers their cost. A very few will do well enough that they are genuine prospects for a big liquidity events. Those companies will be under the most pressure to cash out. Gitlab has taken several rounds of funding now, some very large. These do not appear to have been made on the basis of current assets or current earnings. It seems reasonable to conclude that VCs predict a large exit and wish to ensure that Gitlab will make it to what is, for them, the finish line. Disclaimer: I have never worked in finance and my views are cobbled together from books and blogposts.