If you are VC who cares about revenue if investors are willing to give you millions up front? You have made your money. Game over.
The rest is just "try". This is acceptable because outcome is unpredictable and expectations are reasonably low. It's a gamble, and anyone contributing funding knows it.
If you can make money for your clients, great. If not, you are liable for nothing.
It's a good feeling for VC if they can make money for their clients. But VC still make good money either way. That is just how it is.
This is true to some extent in other professions as well. For instance, lawyers, on whom VC closely depend.
If lawyers advising startups can help their clients, it's great. But even if they don't, they still make good money.
And like with VC, clients recognise little is "guaranteed". Often they do not even know what to expect. Expectations are reasonably low.
What matters here is reputation. If someone's reputation is enough to convince others to give them money, with little expectation of "results", then that's abusiness.
There was an op-ed in the NYT a month or so ago called "The Zuckerberg Tax" written by a tax lawyer.
Read it.
Consider that the question it raises may not be how much the kid is "worth" (and his accompanying tax liability), but how much others are willing to give him, with no real expectation of return. Be they Microsoft, Russian investors, advertisers, ..., or his bank.
He no doubt has great "credit". He, through the popularity of Facebook, has a reputation. He may not be able to produce a billion dollars in cash, or even a fraction of it, but he surely can borrow it, the act of which amounts only to a change in a bank's computer database somewhere. We need not see the cash itself. People are willing to give him money. With no expectation of return.
And that my friends - "credit" - is the cause of most of America's economic problems. Spending money we don't have. And assigning large dollar values to things when it's unlikely the physical currency itself could ever be produced. "Show me the money." The real money, that I can hold in my hand. Not the funny stuff that is just the subject of talk... and op-eds.
The rest is just "try". This is acceptable because outcome is unpredictable and expectations are reasonably low. It's a gamble, and anyone contributing funding knows it.
If you can make money for your clients, great. If not, you are liable for nothing.
It's a good feeling for VC if they can make money for their clients. But VC still make good money either way. That is just how it is.
This is true to some extent in other professions as well. For instance, lawyers, on whom VC closely depend.
If lawyers advising startups can help their clients, it's great. But even if they don't, they still make good money.
And like with VC, clients recognise little is "guaranteed". Often they do not even know what to expect. Expectations are reasonably low.
What matters here is reputation. If someone's reputation is enough to convince others to give them money, with little expectation of "results", then that's abusiness.
There was an op-ed in the NYT a month or so ago called "The Zuckerberg Tax" written by a tax lawyer.
Read it.
Consider that the question it raises may not be how much the kid is "worth" (and his accompanying tax liability), but how much others are willing to give him, with no real expectation of return. Be they Microsoft, Russian investors, advertisers, ..., or his bank.
He no doubt has great "credit". He, through the popularity of Facebook, has a reputation. He may not be able to produce a billion dollars in cash, or even a fraction of it, but he surely can borrow it, the act of which amounts only to a change in a bank's computer database somewhere. We need not see the cash itself. People are willing to give him money. With no expectation of return.
And that my friends - "credit" - is the cause of most of America's economic problems. Spending money we don't have. And assigning large dollar values to things when it's unlikely the physical currency itself could ever be produced. "Show me the money." The real money, that I can hold in my hand. Not the funny stuff that is just the subject of talk... and op-eds.