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Why VCs Often Turn Away Promising Investments

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This story appears in the April 2013 issue of Entrepreneur. Subscribe »

True story: My VC firm just had a fantastic meeting with a potential . The company is in a sector we target; it has strong growth potential and a seasoned management team. Yet the meeting ended with us turning them down.

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In VC speak, the reason behind the rejection went like this: "Our second fund's vintage necessitated a later-stage investment with liquidity prospects that better matched the LP-contractual investment and harvest period."

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