Do companies who have the investments of venture capitalist make more profits?
physical kaiser asked:
It seems like only the VC is making money and the company isn’t really making a profit.
It seems like only the VC is making money and the company isn’t really making a profit.
In Science we trust:
The investors, typically called limited partners, in Venture Capital funds do make money when the investments obtain liquidity. That is usually via a Initial Public Offering (IPO) in the stock market or a buyout by another corporation. The Venture Capitalists also make money as they are partners too. Plus they get paid for managing the fund. So, they make more than the investors. However, the managment fees are typically dwarfed by the payoffs of successful companies if the fund is successful at all. Note, not all VC investors are companies. Many limited partners are wealthy individuals.
May 27, 2009, 7:49 pm