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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

ย โ€ขย 

Helixworks Technologiesย โ€ขย 1m

Startups donโ€™t need to be profitable earlyโ€”just valuable. Most fail, but VCs donโ€™t need all of them to succeedโ€”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 companiesโ€”40 will fail, a few will break even, and 1-2 will be massive hits that return the entire fund. Thatโ€™s why VCs chase high-risk, high-reward bets. Theyโ€™re not looking for steady profitsโ€”theyโ€™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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