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The video seemed pretty straightforward that the VCs are there to take advantage of the founders need for more capital than they have access to in order to cros
by erikerikson 3y ago
The video seemed pretty straightforward that the VCs are there to take advantage of the founders need for more capital than they have access to in order to cross a funding gap of high initial costs.
"We give you money, you give us much more back"
My father in law had an agriculture business (pollen). They had customers and a product but they needed a three month loan to pay laborers to harvest the product so that they could use it for customers and then invoice and collect. The labor was well paid due to urgency dynamics, the farms they serviced had yields paying more (or avoid loss greater) than the cost of services, and there was profit left over for the banker's share plus his own business. As a side effect the food supply was both more stable and abundant. Without the capital less excess (or greater losses) would have existed.
This is effectively what VCs are hoping to find except at a far higher level of scale.