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This is a pretty zero-sum way to look at VC/investment/startups. In reality, GPs have to hustle to get LPs to invest in their fund. Then, they're able to take t
by solumos 5y ago
This is a pretty zero-sum way to look at VC/investment/startups. In reality, GPs have to hustle to get LPs to invest in their fund. Then, they're able to take that money and create a portfolio out of it by investing in big opportunities. They really only want to invest in businesses that can exceed a $1B valuation (sometimes $10B these days). The very best VCs have a track record of identifying $1B+ opportunities and helping those companies get there.
As a founder, if your business doesn't fit that mold you probably shouldn't raise from VCs. There are angels out there with a higher risk tolerance who write fewer checks and are more interested in contributing directly to a company's success outside of capital.
The idea that workers are diluted by the VCs is usually bogus. In an upside scenario, everyone wins. In a neutral exit scenario, the employees get to keep their wages, the investors get their money paid out first (if there's any left) and the founders/employees get hosed. In a downside scenario, everyone loses, except employees still get to keep their wages earned.
It seems like you're conflating wage workers vs VC vs founder. Each of these roles has a wildly different risk profile when it comes to a startup.