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They put in capital, true, but it wouldn’t be available unless this was the most likely fit for their investment profile, vs say low yield treasuries. The inves
by dv_dt 8y ago
They put in capital, true, but it wouldn’t be available unless this was the most likely fit for their investment profile, vs say low yield treasuries. The investors are just playing maximization game and have much more security than the lyft founders even if they lose ecery cent.
We lionize the “risk” of VC investors far too much.
- ryandrake 8y agoAlso, let’s get real: VC investors are rich. They were rich before the investment, and they will be rich afterwards, regardless of the outcome. Maybe they will be ultra-rich after an exit, or they’ll be simply super-rich after a failure. Either way, they are already in the “set for life no matter what” category, so really, are they taking that much of a personal risk?
- dv_dt 8y agoThat's what I mean, the investors are so rich, it makes complete sense to take a portion of their riches and invest in high risk high reward states where most of the outcomes will be every cent is lost. It's not only set for life type money, but so much money that hiring teams of people to figure out how to even invest the proceeds in a rational way, of which VCs are just one subset of the team (outsourced, insourced, or otherwise).