#172 August VC Fund Stats

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August VC Fund Stats

Hello friends! It’s good to be back here with you all as we approach the halfway mark of Q3! Since we’re back from the beach, we thought it would be a good time to share some of our favorite VC fund stats from recent readings. Here we go!

4,000 firms, $1 trillion in assets, $200m average fund size - how did we get here? A picture is worth a thousand words. Some of our favorites below (full article linked in header if you want to dig in further).

Right up there with pattern recognition, the power law is one of the most frequently used concepts to talk about venture capital. So much so that one of the best books about the industry took it as its title. When people have unpacked industry returns for venture funds they often find the majority of the returns are driven by just a handful of companies out of thousands funded each year.

The same is true in public markets where, for example, a few big tech companies, like Microsoft, Nvidia, Amazon, Google, and Meta, make up almost 40% of the S&P 500. Across thousands of stocks there is so much attention and power pulled towards a select group of names.

One important distinction is that, while these select few names that make up the "20% of inputs" are critical for the market in aggregate they are not always the most important thing at the individual level.

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