I think this is a fairly dated view.
The best VCs aren’t remotely “flippers”.
First, most VC funds have 10-14 year lifetimes. And the VCs are paid a decent salary most of that time. So they don’t need to flip for short-term cash.
Second, VCs make the really good money if they hold longer for the real big exits. Power laws, my friends.
Third, most VCs are able to raise another fund with just “paper gains”, i.e., before returning significant cash-on-cash. So the best VCs aren’t really that pressured to return cash faster than otherwise makes sense organically.
If you are managing a reasonably large fund, and want to return 3-10x of it to your investors … “flipping” rarely works.
It generates profits, yes. Just not enough of them.
Having said that, mediocre or poor performing funds may feel a lot of pressure to generate cash as the years go on. They’ll be unable to raise another fund, and will need more “proof”.
But the very best funds aren’t flippers. In fact, they’re anti-flippers. They want to keep doubling down. That can produce the opposite problem — founders want to sell when a good offer comes in … but VCs want to keep playing another card.