A VC makes their money on the few times they win, and it more than makes up for all the companies that lose completey. Just barely making back their investment is no better for them than returning nothing at all. (In fact, they could be putting the money into market securities with risk equal to your company's likelihood of return, so you have to give them [that same risk multiplier] * [their original investment] or they lose money, even if you give a "positive return.")
A VC would much rather give you 1mil five times and have you kill four of those companies and make a 100x return on the fifth one. Sitting around forever on the first one trying to eek out a 2x return means you never build the fifth one, and that's a much lower aggregate return.
A VC would much rather give you 1mil five times and have you kill four of those companies and make a 100x return on the fifth one. Sitting around forever on the first one trying to eek out a 2x return means you never build the fifth one, and that's a much lower aggregate return.