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Investors are taking a risk with other peoples' money. And their management fees usually cover very juicy base compensation, so their downside risk is minimal.

• gowld 4y ago
  Those fees don't last long if they get bad returns.
  • metacritic12 4y ago
    "What do you call this thread?" "Capitalism!"
  • fisf 4y ago
    Which is why fast growth is so important. It's irrelevant to some degree if this growth is real (driven by a better product), or inflated (by offering steep discounts, ads, marketing, etc). It looks good on paper, and allows raising the next round. This is of course an order of magnitude bigger and demands even more growth. VCs look like geniuses in that case. Value of fund goes up, fees go up. Until they don't.