Power law on VC fund returns for LPs

• Hence, hard for new funds to break in

"Past success begets future success due to positive signalling."

VC investing is zero sum game

• Funds ownership comes at the cost of another fund's ownership

Power law on returns within a fund's portfolio

• 50% investments are impaired
• 20-30% singles or doubles
• 10%-20% home run

"At bats per home run" - proportion of investments that hit home runs

VC cardinal sins:

"Category right, company wrong."

"Error of omission over commission."

"Company right, ownership wrong."