It's also important to remember that the risk/return preferences between VC & founders are not aligned.
VC wants to have a portfolio of 100 companies swinging for the fences, knowing most of them are going to zero.
Individual founders do not want to go to zero, and many would be happy hitting singles or doubles.
That is, VC wants their founders to take more risk than is expected value positive for any given founder. A lot of the legal & financial levers VC uses are to force this upon you as a founder.
VC wants to have a portfolio of 100 companies swinging for the fences, knowing most of them are going to zero.
Individual founders do not want to go to zero, and many would be happy hitting singles or doubles.
That is, VC wants their founders to take more risk than is expected value positive for any given founder. A lot of the legal & financial levers VC uses are to force this upon you as a founder.