I’ve learned a lot here.

The bottom line is, for most people, making 5–10% of the fund size investments is the only way to do “well” as a VC. I.e., if you want to do 4x+ or better.

Because most VCs just can’t do enough deals to make it up “in volume” by doing 10–20x more small deals.

Do the math … a little $100k investment, even if it does 20x … it’s not enough. That’s only 10% of the fund. This is even tougher in B2B/SaaS where there just aren’t any Facebooks or WhatsApps or Ubers out there.

So you gotta find a lot of 20x+ deals to make this little tiny $100k investments strategy work even in a $20m fund.

The earlier stage you invest, the more total wipe-outs you’ll have. So angels have to make it up in volume, probably.

But most VCs just don’t have 20+ great investment ideas a year. It’s too hard.

Concentration isn’t a “better” strategy. But it is easier to implement, for 9/10 investors in a fund of any material size.

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