VC belongs to the Financial Services industry. For a VC Investor – in which category I’ll also include Private Equity, Angel, Seed investors – investing in startups is their mission. They raise funds from Limited Partners and invest them in startups with the express objective of selling off their shares in the investee company at a higher price than what they bought it for. For more details of VC Investment Model, see Teardown Of The VC Investment Model.
The goal of VC model is to earn "Multibagger Returns in 2-3 Years". Some VCs like @letsventure overachieve it, other VCs underachieve it. But the goal does not change. #VC #VCModel pic.twitter.com/MJ4rvpYkid
— GTM360 (@GTM360) October 24, 2018
On the other hand, investing in startups is not the mission of a Strategic Investor – making and selling its own products and / or services is. A strategic investor invests in a company because the investee company brings technology, domain expertise, market presence or some other asset that enhances the strategic investor’s market standing. Strategic Investors typically don’t flip companies in which they take a stake.