The idea that power-law returns are the ultimate underlying condition of venture capital is not sufficient to understand the complex reality of markets.
The most important thing for a family office is to ask what unlocks the maximum return when market conditions are far from being a level playing field.
In Hong Kong, cross-border flows and the relationship with Chinese regulators can surpass the theoretical power law in importance.
For example, focusing on strategic investments related to China, where decision quality regarding timing and network access is crucial, can generate much more reliable returns than blindly chasing an elusive unicorn.