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The most interesting but least often addressed question is: why does the distribution of financial returns in a VC portfolio reflect a power law? In this case below it was two Grand Slams. It is not always exactly two Grand Slams, but the pattern appears again and again.
My view: The power law distribution represents Matthew effects happening in multiple dimensions (skills, networks, judgment, deal flow, etc.). The more skillful, wise and successful you get the more skillful, wise and successful you get [repeat with nonlinear impacts].
Venture capital is about harvesting optionality. "Payoffs [which] follow a power law type of statistical distribution, with big, near unlimited upside but because of optionality, limited downside.” Nassim Taleb

The power law is inherent in the optionality that drives VC returns.
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