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Are you suggesting VCs just toss money away on projects they don't expect to have any return? If a product turns a profit it's because the market wanted it, not
by talmand 15y ago
Are you suggesting VCs just toss money away on projects they don't expect to have any return? If a product turns a profit it's because the market wanted it, not because someone invested in it. Of course you have to understand when I say crap app that's a matter of perspective.
- eli_gottlieb 15y ago>Are you suggesting VCs just toss money away on projects they don't expect to have any return? Yes. Their entire business model is built around start-ups having a 90% failure rate, with the remaining 10% being such massive successes that they make up for everything. I mean, look at the facts. VCs invested in Groupon, Yahoo, and Pets.com. They are expecting that some start-ups in which they invest will not ever make a profit and will go under.
- _dps 15y agoI'm a bit confused by lumping Yahoo in that group (unless your goal was to show a sampling of companies including one big win, in which case I apologize for misunderstanding). Yahoo was surely a resounding success for the VCs who backed them, and has been a major contributor to life on the internet for over 15 years (so it's not just a financial win). They've also outperformed NASDAQ since 1998 despite being a poster-child for overvaluation, so they've been a (comparative) win for retail investors as well.
- eli_gottlieb 15y agoThat's kind of my point. In fact, let me go back and add another company from that era: Netscape. VCs backed Netscape, too. Their whole model includes a built-in failure rate.