> you want to be able to show that the VC money is being put to good use, and quickly That's pretty much it. The VCs, at the height of the bubble, were forcing

> you want to be able to show that the VC money is being put to good use, and quickly That's pretty much it. The VCs, at the height of the bubble, were forcing startups to take far more funding than they needed. A startup company can't just sit on the cash and do nothing with it, the funding needs to be put to work ASAP in order for the VC companies to justify having provided the funding. Most startups are software companies, so they have limited ability to spend those mountains of VC money on capital expenditures. They can't spend their VC funding on building a factory or something. The largest expense in a software company is human resources, so that's what they end up spending their funding on (even if it's not in the best interest of the founders, employees or customers). > Personally I don't quite understand why a founder would want to take a huge pile of money and then burn it as fast as possible trying to hit some hyper-growth target, when they could instead take a small amount of money and set up a stable revenue-earning business They don't have a choice. If they don't accept the huge pile of money, they get nothing. The VC business model isn't compatible with slowly building a stable revenue-earning business. From the private equity investor's point-of-view, if they wanted to invest in a stable revenue-earning business, they can just go and do a leveraged buy-out of a well-established, stable revenue-earning business (like a health care business, or an older enterprise SaaS business, etc.) and skip all the risks associated with the startup phase. They only want to invest in a startup if it's a hyper-growth moonshot, and they don't mind burning founders, employees, customers and their own money in the process because they only need 1 in 100 startups to succeed and the other 99 are just tax write-offs for them.