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Investors are investing millions and billions $ in many new startups. I keep on getting the news like this. i my question is how investors are earning? how much percentage they are expecting from these new startups? Even though most of the startups a

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Nimesh Pinnamaneni

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Helixworks Technologies • 2d

Startups don’t need to be profitable early—just valuable. Most fail, but VCs don’t need all of them to succeed—just a few outliers. Venture returns follow a power law: a tiny percentage of startups generate nearly all the returns. A typical VC fund invests in 50 companies—40 will fail, a few will break even, and 1-2 will be massive hits that return the entire fund. That’s why VCs chase high-risk, high-reward bets. They’re not looking for steady profits—they’re hunting for unicorns (or Indicorns). Also, VCs get paid regardless. They earn management fees (2% per year of the fund size) and take 20% of the profits (carry) from exits.

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