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What does the phrase, carrot of profits, mean? The context is

And for smaller companies, using the carrot of profits 20 years away isn’t likely to sway VCs who can see no further than three.

A little of profit?

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    By the way the grouping is "carrot of (profits 20 years away)", not "(carrot of profits) 20 years away." – David Z Oct 8 '11 at 18:24
  • @DavidZaslavsky Important point to point out. +1 – narx Oct 8 '11 at 19:13
  • what can I say - that the original text from the book – chupvl Oct 9 '11 at 18:18
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Donkeys may be encouraged to undertake forward motion either by hitting them on the rear end with a stick or by dangling a carrot ahead of their front end. Hence the expression stick or carrot means to offer either punishment or reward to those we would wish to act in a certain way. In your example, the prospect of profits 20 years down the line is presented as being akin to tempting a donkey with a carrot.

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  • I've often wondered if donkeys are so stupid they willingly walk round a treadmill all day just because an unreachable carrot has been hung in front of them. Sounds like an issue to explore on skeptics.se! – FumbleFingers Oct 8 '11 at 16:40
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    @Fumble I don't know about donkeys, but my dog movements could be used to provide energy for a whole city when running after its tail. – Dr. belisarius Oct 8 '11 at 20:52
  • Thank's! I can't get the metaphor about the carrot in this context. – chupvl Oct 9 '11 at 18:19
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Simplified, the sentence becomes:

"Using the carrot isn't likely to sway VCs."

The carrot is essentially an incentive, shortened from the metaphor, "the carrot and the stick."

What the sentence says is that VCs of smaller companies--who are looking for a quick profit and exit in perhaps just three years down the line--cannot be swayed by the possibility of profit (i.e. the carrot) 20 years later.

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It means reward as in the phrase "the carrot and the stick", which refers to the use of a carrot as a reward and (hitting with) a stick as punishment for a horse or other draft animal.

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