[arohner]

> why is it even the case in the first place?

1) Because VCs were working on 'fixed income' 2) because they could. The standard deal historically is "2 and 20", i.e. the VCs get paid 2% of the fund raised per year, and the first 20% of the profit. That 2% is used to pay for salary and office space, and doesn't increase until you raise a new fund, and the 20% isn't realized until the fund ends in 10 years. So pushing the cost onto the startup saves them a decent amount of money when you're doing dozens of deals a year.

[anotherfounder]

By pushing it out on startups that are supposed to be conservative with spending, and investing only on the product? Seems extremely short-sighted.

[arohner]

At the end of the day, this is all the LP's money, and this comes down to how much the LPs pay the VCs for their service.

Leaving aside bloat in lawyer rates because the VC doesn't care about price, the total cost to do the deal is basically unchanged though.