If you have tens of millions of dollars to invest, it's not easy to find enough businesses to invest in. For every business, the investor has to do some researc

If you have tens of millions of dollars to invest, it's not easy to find enough businesses to invest in. For every business, the investor has to do some research and due diligence, and there's a non-negligible cost associated with that. Finding 10 big-bet companies is easier than finding 50 small-bet ones. It's analogous to how a fund-manager friend has trouble finding enough businesses into which he can put $50m a pop - his bank simply doesn't make smaller investments. > wouldn't it be logical to pick one that was trying to grow at a slow, responsible rate? Wouldn't it be more logical to find one which had the potential to explode, and which they could own more of with a large investment? These guys don't want small bites of a small-to-medium business, they want big bites of a potentially massive one. And they're willing to take big losses on the losers in order to get the big winners. > Is it that VCs won't stoop for pennies? Because - I've always thought it was kinda stupid when people said they wouldn't stoop for pennies. That's money. Why would you leave it lying on the ground. Because there's a cost in picking them up, and the value of a penny is too low for many people to bother doing it. I certainly wouldn't stoop for a few pennies on the sidewalk - they just aren't worth the effort. It's the same with VCs, I'd guess.