The Underbelly of Venture Capital
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Because that's not the VC's specialization. That type of investing is what Warren Buffet does. (E.g. the Graham-Dodd school of "value investing".)
- Warren Buffet : cares about Earnings-Per-Share, free cash flow, dividends, etc. This naturally points to mature and healthy companies with quality management like Coca-Cola and Geico. He doesn't flip companies. He's not a turnaround specialist.
- private equity funds like Blackstone / Carlisle Group : cares about things like EBITDA to know if the company's financials can service a loan (because they buy companies with loans.) Like Warren Buffet, they look at mature companies instead of startups. However, unlike Warren Buffet, they are open to investing in distressed companies that need a management turnaround or some capital investment. They will also look at companies with degraded bond ratings and buy them at a discount and use it if necessary to take control of a company. They will flip companies (hopefully for a higher price) after some years of ownership.
- hedge funds : they have all sorts of ways to invest in companies including buying stock, playing with options like puts, calls, derivatives, etc. They typically ignore startups. They can also ignore all companies and only play around with commodities, currency exchanges, or real estate speculation.
- Venture Capital : look at startups (even if they don't initially have revenue or earnings-per-share) in hopes of a unicorn breakout. VCs don't do management turnarounds, don't buy distressed debt, don't play with puts/calls/derivatives. They specialize in "new ventures" i.e. startups.
It's all about specialization and investor's skill set. Warren Buffet admits he doesn't know how to evaluate startups. Likewise, VCs are not in the "value investing" game like Warren Buffet. A big pension fund like California CalPERS will be an Limited Partner in all 4 of the above type of investment funds to diversify.
The VCs are doing what the LPs that gave them money expect them to do: invest in startups.
If the VCs were to look at EPS, they would no longer be VCs. The LPs don't need VCs to do non-VC type of investing because the LPs can simply go to one of the other investment vehicles that already specialize in analyzing EPS. (E.g. the LPs can buy some of Warren Buffet's Berkshire Hathaway stock.)