VC is dominated by a few firms. What is the scale economy? Few geniuses? Info of seeing most pitches? Ability to create new fashions? Other?
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OK, but that doesn't predict concentration. Most restaurants fail too.
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And I'm asking about the source of the superstar effect. Most industries don't have it, why does this one?
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network and filters to get access to many of the best of opportunities? Easy to scale that
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But what are those contacts used for exactly? Pairing firms together into partnerships?
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Perhaps you saying that few startups that win big put big cash infusion into parent VCs, which then are huge till they burn out?
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This has specific prediction on time trend of VC size - the big ones today all got bit all of a sudden when one startup got big.
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In addition to what is stated elsewhere, a high-reputation VC creates value when investing via signaling, so rich get richer
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OK, but then what creates the high equality in reputation? A few geniuses?
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OK, but why approach the top few first? What is more attractive about being funded by them vs others?
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