VCs are not focused on the short-term profitability of your company. This might seem counter-intuitive at first since turning a profit is the objective of most businesses. However, rather than focusing on maximizing profits, VCs are focused on maximizing shareholder value. When shareholder value is maximized the value of the company at exit is maximized - that's the big win for everyone: VCs and entrepreneurs.

Most VCs invest in high growth companies where would-be profits can be re-invested to stimulate growth. Growth in these companies creates more shareholder value than profits paid out as dividends. As a result, VCs generally encourage management to invest all or most excess cash in growth opportunities until the high value opportunities are exhausted. When these opportunities are exhausted less cash will be reinvested, yielding a healthy profit.

As a result, when you are speaking with VCs and walking them through your model understand that they will be more focused on revenue growth in the short term. However, in the medium-term, they will want to understand how profitable the company can be.