[Elite]

Their business model assumes most of their investment doesn't take off, with a few rock stars that make up for the losses.

Incidentally, which is one reason cash flow positive startups should really think before accepting VC money. VC's are happy with a 10% success rate. You on the other hand, need a 100% success rate. Interests are not wholly aligned.

[jiganti]

So you're saying that the founders should be wary that VC's aren't as risk-averse in this sense?

[swombat]

No, he's saying the VCs are much less risk-averse.

[itblarg]

Agreed 100%. VCs aren't in the risk game. They're in the risk-mitigation game.

[anamax]

In addition to risk-mitigation, VCs are also in the "find things that are much less risky than they appear" game.

[po]

VC's are diversified… you aren't.