[johntarter]

Venture capitalists aren't ignorant, their business revolves around knowing exactly what churn is. Cursor has raised $1 billion with a $9 billion valuation. VC's willing to put in that much money has looked at their data and knows what the retention rate is.

[mrweasel]

If their plan is to make their money back selling the company, then they don't care about revenue or retention rate. The company just need to look like it might be doing well.

No, venture capitalists aren't ignorant, but their goal also might not be to build and run a healthy company long term. It might be to turn a quick profit by selling a startup to another company.