Bingo. Instead of 1 in 20 becoming a huge success (100x) and the other 19 fail, maybe for us it's 10 in 20 are "base hits" that return 2-5x and the other 10 fail.
Those are contrived numbers for this example, but you get the idea. I expect more of them to be singles/doubles, fewer to fail than the typical VC bets, but we'll have no home runs.
Have you seen the total returns of VC money? Too lazy to link stuff now but a perfunctory search will reveal that the returns are not what you think they are. They essentially approach 0% outside of the few powerhouses.
Can’t really use the Andreessen-Horowitz / Sequoia returns as representative to the entire industry.
Those are contrived numbers for this example, but you get the idea. I expect more of them to be singles/doubles, fewer to fail than the typical VC bets, but we'll have no home runs.