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It's an open secret that investors get 20% of the upside for 1% of the work of founders. Parrot enough plausible nonsense to impressionable people to get favorable investment terms and you're well on your way to monetizing your position as a newly minted thought leader.

Nice work, if you can stomach it.

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It's also an "open secret" that investors lose their investment when the founder fails. In addition, more than 90% of VCs are money losers, overall. Founders are taking the risk with their time, investors are taking risk with their money.

Investors are taking a risk with other peoples' money. And their management fees usually cover very juicy base compensation, so their downside risk is minimal.

Those fees don't last long if they get bad returns.

"What do you call this thread?"

"Capitalism!"

Which is why fast growth is so important.

It's irrelevant to some degree if this growth is real (driven by a better product), or inflated (by offering steep discounts, ads, marketing, etc).

It looks good on paper, and allows raising the next round. This is of course an order of magnitude bigger and demands even more growth. VCs look like geniuses in that case. Value of fund goes up, fees go up. Until they don't.

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