Deal Evaluation
Venture Power Law Simulator
Model how a small number of outlier returns drive overall portfolio performance.
Portfolio Setup
Outcome Distribution
Write-offs
Small returns
Big wins
Home runs
Portfolio Outcomes
Portfolio MOIC
6.00×
$60.0M returned on $10.0M deployed
Power Law: Home runs drive returns
42% of total returns come from just 1 home run (5% of portfolio)
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How to Use This Tool
Set your portfolio size and the distribution of outcomes. The simulator runs scenarios showing how the power law plays out — where a small number of winners drive all fund returns.
Why This Matters
The power law is the fundamental math of venture capital. In a typical fund, 60–70% of investments lose money, 20–25% return 1–3x, and 5–10% generate all the profits. One 50x return can make an entire fund successful even if everything else goes to zero. This is why VCs optimize for upside potential, not average returns.
Industry Benchmarks
Winners in a Fund
1–3 out of 20
Only 5–15% of investments drive meaningful returns
Loss Rate
50–70%
Most VC investments lose money
Home Run Return
50–100x+
What a fund-returning investment looks like
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