So many VC funded exits are actually massive failures
So many VC funded exits you hear about are actually massive failures and nobody made any money
Which is completely fine if they weren't then hailed as massive successes on TechCrunch and by the investors and founders on X
It's flat out lying
And the reason why is so the founders can fatten their resume to then do their own VC fund next
The fake exit helps them raise $10M-$100M for their VC fund
With 2.5% management fees that's instantly $250,000/y to $2.5M/y income essentially FOREVER! Even if the fund never makes any money on its investments!
It doesn't end there. Funds have 20% carry or more usually. Carry means the founder of the fund gets 20% of the entire fund's profits first. So if the fund does for example double, the founder of the fund gets $2M-$20M payout on a $10M-$100M fund
They then become friends with the founders they invest in and tell them to do the same trick
I do believe startup founders generally wish they all had a succesful startup but in case they don't (which is 95% of cases) they have an instant path to $250,000/year in management fees
For that to happen though, they and everyone around them need to lie about what a massive success the startup was eventhough it was a flop. Or they wouldn't be able to raise money later on for a fund. And VC investors, PR agencies and tech media are ever so happy to help with that. Which is the sad part!
Also lots of NDAs in this industry so you won't ever hear about this from anyone but me cause I'm independent and don't have investors
See ya
P.S. I'm on Twitter too if you'd like to follow more of my stories. And I wrote a book called MAKE about building startups without funding. See a list of my stories or contact me. To get an alert when I write a new blog post, you can subscribe below:
