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The Meeting That Showed Me the Truth about VC's and How They Don't Make Money

August 12, 2016View for printing

I had a meeting with a well-known startup investor yesterday. The talk somehow pivoted from my seed-seeking startup into talking about the macro view of venture capital and how it doesn't actually make sense. Or maybe it does make sense? Guess depends on your point of view.

"95% of them aren't profitable." he said.

I'll clarify what that actually means: 95% of VC's aren't actually earning enough ROI to justify the risk their investors (LP's) are taking.

I'll attempt to reconstruct the arguments leading to this hard-to-grasp realization of an industry so often idealized from the outside.

Tomer Dean

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