Portfolio approach in VC
Venture investors have a portfolio of companies they invest in. 1 has to be a home run and cover all the sins and mistakes of the rest of the portfolio. Venture investors also have a time frame in which to make their money. This is usually 7 years with 3 1-year extensions. Thus, since everyone one of their investments looked like a home run at the time they wrote the check, they will push all their portfolio companies to strive to be that huge return. This could mean taking on a riskier path than would be idea, since the exit is supposed to happen within the life of the fund. A more stable, steady path might get the company larger in a longer amount of time, but that won’t always work for the venture investors. Be aware of where the fund is in their life, and where you fit in their portfolio.