1/ In this essay on power laws in venture capital some of the assumptions seem wrong or incomplete. http://reactionwheel.net/2015/06/power-laws-in-venture.html … cc: @nntaleb
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Replying to @trengriffin
2/ My posts on power laws in VC include http://25iq.com/2012/10/06/the-matthew-effect-and-vc-performance/ … Neumann doesn't dig deep enough looking for root causation of VC power laws.
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Replying to @trengriffin
3/ Power laws in VC are caused by path dependence. People not making decisions independently re complex adaptive systems cause power laws.
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Replying to @trengriffin
4/ Power laws are fractal in VC (e.g, in portfolio, between firms). To understand PLs you must understand optionalityhttp://25iq.com/2014/04/05/the-best-venture-capitalists-harvest-optionality-dealing-with-risk-uncertainty-and-ignorance/ …
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Replying to @trengriffin
5/ "Convexity propositions should be embraced – concave ones, avoided like the plague...'optionality’ is what is behind the convexity" Taleb
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Replying to @trengriffin
6/ "Payoffs from research are from Extremistan; they follow a power-law type of statistical distribution" N. Taleb http://25iq.com/2013/10/13/a-dozen-things-ive-learned-from-nassim-taleb-about-optionalityinvesting/ …
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Replying to @trengriffin
@trengriffin one of the reasons in fields that persistence seems so important is you need to do many things well. No shortcut to trying hard1 reply 0 retweets 0 likes -
Replying to @DanielleFong
@DanielleFong Top VC portfolios prove trying hard isn't enough. ~2 of 40 are unicorns. No way to predict at the start. All must be capable.5 replies 0 retweets 0 likes
@trengriffin I don't really think "tech Unicorns" are really even the right sample when talking about greatness. Valuations too subjective
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