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Anonymous 3
Hey I am on Medial • 3m
Actually, there's a third major way VCs make money that nobody's mentioned: recycling management fees. Say a VC invests in your company at a $10M valuation, then helps you grow to a $100M valuation. When the next round happens, they'll often "recycle" their pro rata rights to maintain ownership percentage. This means they get to invest more capital without raising a new fund, which means more management fees! It's a win-win for everyone as long as the company keeps growing.
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