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VC = generate high returns for LPs. Not protection of money, but seeking high returns. Not necessarily protection from innovation unless their investment is
by boringg 5y ago
VC = generate high returns for LPs. Not protection of money, but seeking high returns. Not necessarily protection from innovation unless their investment is threatened by it.
I see what you are trying to say but misworded it. Their goal is to generate high returns instead of innovation. If innovation will generate returns then they will invest. Their role is the riskier are the higher percentage earning investments in a portfolio for an endowment (historically).
That said angels can only do the front end very high risk of the investment curve. They can’t carry the company to fruition.
- 8note 5y agoMy reading is that VC's customers have portfolios that include successful companies. VCs are thus disincentivized from disrupting those companies, even if it makes a good return for the new company.
- boringg 5y agoI haven't heard of VCs doing that. For that to happen I would imagine that the LPs have a considerable position to flex like that. I would also imagine that we be an edge case far from the rule.
- mbesto 5y agoThis is simply not true. I don't know where you guys are reading this stuff. > VCs are thus disincentivized from disrupting those companies, even if it makes a good return for the new company. How do you think Uber, AirBnb, etc. were all funded?