VC Hub

Venture Capital Hub Curriculum Resources

September 16, 2026

VC Hub Investment Committee Exercise for students to view as they work in "investment committees"

Got returns?

Venture capital portfolio returns follow a power law distribution (where a tiny fraction of investments generate the vast majority of returns), whereas the returns of mature, large-cap companies like those in the S&P 500 typically mimic a normal distribution (a symmetric bell-shaped curve centered around an average market return). [1, 2]

Distribution of Returns - Venture Capital vs S&P 500 Companies

The Y axis shows the relative multiple of return, ranging from no or low return to extreme return. THe X axis shows the rank and order of firms by successful returns.

The first point on the curve is the most successful investment in the portfolio. The curve is a "power" curve because the total return of that first single invesment is greater than the returns of all remaining invesments combined. THe second point is greater than all the returns of the third through n investments, and so on.

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