Tim shares his thoughts on how VC’s think about investments given the constraints they have to deal with.
The need to exit is the core of the venture model. You might have a wonderful business idea, that will make its customers, employees, and managers all happy, but if it is unlikely to exit, and with a sufficient return on the capital put in, we don’t want it. It could in fact generate wonderful cash flow forever, but if we can’t monetize that in a liquid form by the end of the fund, it won’t make it through the partners’ meeting. It is inherent in the nature of the beast.
Some great advice for entrepreneurs!