The Three-Body Problem: Finding the New Stable Points in Venture Capital

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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This blogpost explores venture portfolio construction and the various trade off implications a GP must consider and enables you to construct your own portfolio to understand how various assumptions impact returns to LPs and GPs.