Many VC firms love taking huge risks on early stage startups. Most VC firms will invest millions of dollars on certain ventures knowing that only one or two may succeed. However, the ventures that do hit it big make a ton of money for the firm. Because of the huge risks that VC firms are undertaking, there could be a situation where every deal the VC firm takes fails. The firm would lose all of its capital and most likely go out of business. Luckily, most VC firms have relationships with other companies that could loan them money to cover debt obligations. If this situation was to occur, it would be considered a bailout. It is easier for a healthy company to bail out the struggling VC firm instead of allowing all of the startups to fail because of poor money management decisions by the VC firm.