Why? Because his stock tips and investments strategies worked. People made money off his (free) advice. So, when he incorporated Scion Capital, LLC, he had a number of enthusiastic investors willing to give him millions of dollars with few strings attached. In fact, he had enough leverage over his investors to dictate terms to them. One particular term he made his investors sign off on was a long-term commitment policy. Investors who agreed to invest with Scion Capital had to be willing to commit to a long-term investment policy that prevented them from pulling money out on a whim. This long-term commitment policy would serve him well when he started pitching the idea of shorting CDOs to his fellow investors. Most of his investors had never heard of credit-default swaps or collateralized debt obligations, or if they had heard of them, they had only a cursory knowledge of how they worked. Additionally, many of them did not share his sentiments that the housing market was going to crash. When Burry started investing hundreds of millions of dollars into these credit-default swaps, many of his investors became uneasy and restless. Some may have even considered trying to withdraw fund from Scion Capital, LLC. But due to the long-term investment policy, their money was tied up long enough for them to realize Burry was right, once again. Generally speaking, those companies who have a steady stream of revenue and maintain solvency are attractive options for VC. In doing research, one would find that VC typically only invest...

It is actually very rare for a VC firm to invest in an unproven, first-time entrepreneur. That said, it does happen. And when it does, the strings attached to the money loaned out by the VC firm can be strangling. That is to say VC want everything and the kitchen sink, high-rate of return, first rights to any collateral should the business sink, oversight and influence (final approval), etc. However, if a first-time entrepreneur makes good on his agreement, and realizes revenue, i.e. The first customer, the VC firm is more inclined to loan him/her money with fewer strings attached. As in the case with Michael Burry, the more often one is right, the more access he/she has to resources, capital, etc.
5)What is the business plan used for? Why is the business plan important?

As mentioned above, business plans provide an essential function to every business idea and/or investment strategy: they are the roadmap to profit. They tell, ideally, the VC everything he/she needs to know about the business and/or investment opportunity in a paradoxically concise but thorough manner. A well-written business plan can be the difference between having millions of dollars for one's passion project, brilliant idea, or dream business and having nothing at all.

Moreover, to the entrepreneur, business plans are really a vehicle for raising capital. It would be nice if one could just ask for money