Cutting through the fluff: excessive reliance on power laws to guide venture capital strategy is a dangerous simplification, as it describes outcomes, not a lever for action.
Focusing solely on statistics can make us forget the need for decision quality and rigorous execution.
These “performance factors” are not universally stable; they are conditional on the market environment.
For example, periods of abundant liquidity can artificially inflate valuations and returns on investment, masking poor decisions.
Our mandate is to ensure stable cash flows for our beneficiaries, not to chase abnormal returns.