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Hello Guys i just want to know how does VC Firms make Money ? Some of the ways which i know is Through Acquisitions and whenever they help startup to raise new round they charges 2% of the total raised amounts Is there any other options that VC make

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Anonymous

Anonymous 3

Hey I am on Medial • 15d

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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