Funds taking a more concentrated approach and investing in fewer companies most likely are assuming that one of their investments has an extremely large outcome while the rest either go to zero or whose exits are much more modest. This is called the power law dynamic and historically, this can be seen happening often in venture capital. Funds takin... See more

A capital allocator would need to have two things happening simultaneously.

1. Limited fund size: The fund would need to be $150M or less, or otherwise, you’ll be back to being wholly subject to the power law.


2. Equity optionality: Investors in a startup utilizing this product need to be able to get returns even if the outcome is smaller. That would req

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