Three characters in this market: the decision-maker, the investor, and the regulator. The idea that power law returns are an overarching category for venture capital performance is an incomplete story, a description of the effect, not the cause.
It is a descriptive observation, not a direct lever for action.
This hierarchy is unstable because decision quality and the upper limit of ROI are the true drivers, especially when liquidity shocks or regulatory reforms redefine the rules of the game.
For example, after SEBI's intervention following a scandal on a brokerage platform, decision quality becomes the main character, and the power law is just a whisper in the background.