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Sure, easily can conclude that BVP and other VC firms believe that they have a particular way to evaluate applications and make money. This does not mean that they have the ability or obligation, or even make an effort, accurately to evaluate every application that comes through their door.

So, likely, net, if they are making money, then they are happy about the money they are making, smile all the way to the bank, and just f'get about the rest.



If they are making money? Venture funds are generally structured using the 2 and 20 model. The first 2 refers to an annual fee of 2% of committed capital for the life of the fund. Venture funds typically have a life of 10 years.

I believe Bessemer's last fund was $1.6 billion, so assuming a typical 2 and 20 structure, that would be $32 million/year, or $320 million over a 10 year fund's life, guaranteed.


Yup, that's one way to make money.

But as in

http://www.avc.com/a_vc/2013/02/venture-capital-returns.html...

on average the VC returns to the limited partners have not been very good.




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