Re:Pittsburgh Gets a Tech Makeover
by Avshalom on Sunday July 23, 2017 @02:15PM
(#14833565)
I feel like it's a pretty recent development that investors don't expect their investments to turn a profit.
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Re:Pittsburgh Gets a Tech Makeover
by closeparen on Sunday July 23, 2017 @02:33PM
(#14833671)
The investment needs to turn a profit for the investor by appreciating in value, which is different from turning a profit in general.
VCs by definition are looking for the Next Big Thing, not to finance someone's lifestyle business. The returns are too low to justify the huge risk. There are many other lower risk ways to get lifestyle-business sized returns for an investor.
VC limited partners invest because it has low correlation to other investments and the potential for 100% returns. If they're just getting a potential 7% (or whatever), they can buy stocks or real estate etc. at much lower risk.