

So.. Alot of people talk about how much VC they raise... - robinduckett

But I hardly hear about how much ACTUAL profit is made, and how much (if any) the VC get back on their investments.<p>Being a simpleton, who has never engaged in VC or even the smallest of investments, I am ill-informed about these kinds of decisions.<p>Being the tight assed kind of guy I am, I never would lend money out unless I knew I was getting the same amount I lent or more back in return. I understand all investments are gambles, but reading about things like a: "4 year startup that took $38million in VC money" (to name a very recent posting) makes me believe that these people starting companies seem to be FAR more interested in how much free money they can get from investors (and how much they piss down the toilet with hardly anything to show for it), rather than how much free money they can make in PROFIT from a viable business model.<p>I do hope I'm not alone in this, and someone can shed some light on my obvious confusion.<p>P.S. I also would like to know how people get investments at all without a viable business model (Twitter). Doesn't seem very smart OR clever to invest in a company with no profit, no way to make profit, and no ideas on how they could make profit. (I realise Twitter has somewhat of a business model now, but considering the amount of money they piss away per month, I don't see them ever making profit).
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adrianscott
Dude, i encourage you to read more... and do the math, re expected values in
probability

also, the money is not lent out -- it's invested. the investor gets equity,
not a loan.

and the money invested generally does not go to the founders, who could earn
more by contracting than through salary, typically. it goes into the biz...

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instakill
Twitter is already making profit thanks to Twitter Firehose
([http://mashable.com/2009/12/21/twitter-is-already-
profitable...](http://mashable.com/2009/12/21/twitter-is-already-
profitable/)).

