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Why VCs do what they do  

Dan Shapiro uncovers some of the reasons why VCs act as they do:

VC behavior sometimes looks insane, but generally it's just sound economics. It's crazy but true: if you know how a VC gets paid, you can pretty much read their mind.

Key points covered:

  • VCs don't want to take any risk
  • They want you to take more money
  • They raise big funds even though smaller ones perform better
  • They're not interested in quick, profitable exits
  • They'll block profitable sales
  • They invest gregariously

Worth a good read to understand the economic incentives of (most) VC firms.

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