When Venture Capitalists invest in your web2.0 site how do you make money or get it in your pocket to cash in.

How do venture capitalist give you money out of the Web 2.0 website you create after it is completed. Do you really get rich when VCs invest in your website or do you make a small amount.

When Venture Capitalists invest in your web2.0 site how do you make money or get it in your pocket to cash in.
I'm no expert, but it seems to work like this.





Step 1. Create a start up with VC funding.


Step 2. ???


Step 3. Profit





As of now, the only Step 2 is getting bought by Google, Microsoft, Yahoo, etc. Ads will never make you rich, especially when bandwidth eats up so much cost.





If you can find another Step 2, I'm sure sites like FaceBook, Digg, etc. would love to hear it.
Reply:When people invest in your company they're not giving you money, they are buying part of the company you own, and that money belongs to the company, that's the money you use to spend on whatever your company needs, things like advertisement and whatnot, but also your and your other employees' paychecques. that's how you get some of the money. but you can't over do it and give yourself a too huge chunk or you'll piss them off. the real money you are planning to make is the same money they plan to make, the worth of your shares. they bought theirs, yours were free so you'll end up making more. they are hoping that the shares will be worth more than what they payed, until you go public they aren't wort h anything technically but really they are worth as much people are willing to pay and your investors payed a certain price for them.





no you don't get rich when they invest in your website, your company gets money, you get rich when the shares you own get worth alot, or from your share of the profits that get produced.





I think that ads can get you rich google such companies that can buy you out only got their money from ads to begin with, now they are big enough to spread out into other areas though and other sources of revenue. i've never payed google a cent and nobody bought google.





basically you want to get as many hits as you can the hits will indirectly be your profit, even if you get bought out, that will only happen when you've gotten enough hits.
Reply:You will only get investments when your site has proved it is capable of earning millions.