Vulture Capitalists . . .

is a term used by disappointed entrepreneurs to describe investors who refused their deal or whom they believe demanded too much equity in return for funding. It is sometimes used by an entrepreneur to identify an investor who has taken an action the entrepreneur disagrees with - such as firing management or liquidating the company. The term is pejorative and reflects the attitude of a disgruntled entrepreneur.

Venture capitalists do not invest in companies to make friends. They invest to make money. Without profits, the investors in the venture capitalist’s fund or pool will not participate in later funds, and the venture capitalist will go out of business. As a result, venture capitalists are extremely picky about the companies they invest in and how well they perform. They do not want their portfolio companies to fail. They can be expected to exercise any contractual rights they have to prevent a portfolio company from failing, even if doing so makes them a vulture capitalist in the eyes of the entrepreneur. See: Deal Flow, Golden Rule, Venture Capitalists.