The smaller the fund, the more you can search for different types of investments, and different structures.
For example, most smaller ‘regional’ and non-U.S. funds are optimized around $50m exits. Sequoia, Benchmark, etc. are optimized around $10b+ exits. Two rather different games. But these smaller funds are usually … smaller.
As a fund begins to approach $100m in size, the business models tend to converge on the ‘standard’ VC model. The LPs (the folks that give VCs their money) are more comfortable with it, and you start to need unicorns or close to it to achieve 20%+ IRR.
But small funds, <$20m-$50m, can make money in many ways.