Why VCs Want Startups To Lose Money

“I hate high margin businesses!” That’s what one of the most famous VCs in the Silicon Valley said to me when I was pitching him to invest in our high margin business.

I was stunned when he said this to me the first time. After all, aren’t high margins good because the business will be more valuable, right?

Well, you have to understand what venture capitalists are after to understand why many investors don’t care about margins or profitability. In today’s video, I’ll explain why VCs are incentivized not to care about profits, why you should care about profitability in most cases, and when your startup should be profitable.

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I hope you like it.