Not counting their 2% annual maintenance fee, a VC makes money from buying shares low, selling them high, and keeping 20% of the high price minus the low price.

Not counting their 2% annual maintenance fee, a VC makes money from buying shares low, selling them high, and keeping 20% of the high price minus the low price. So yes, they make money if the valuation is higher than the when they bought it. Example: - buy 1 million shares at $1. - sell 1 million shares for $101. - (101 - 1) * 1_000_000 = 100_000_000 - 100_000_000 * 0.2 = VC gain of 20_000_000