I'm reminded a bit of http://www.bvp.com/portfolio/antiportfolio, a collection of companies that applied to Bessemer Venture Partners for VC funds, were denied, and went on to make it big.
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.
