How technology markets and venture capital are heading towards a great bifurcation, an explosion of narrative driven value creation, and much more which will meaningfully change the job of technology investors across all asset classes.
Venture Capital functions with a power law where the majority of a fund’s returns come from a small percentage of investments. Because of this, VCs need to know if a single investment can return the entire fund. As Bill Gurley famously said “Venture capital is not even a home run business. It’s a grand slam business.” This is where the Return The Fund (RTF) analysis comes into play.