Before I jump into this, let's start with a baseline truth: Statistics are subjective to the data sets used to generate the stats, and as such, stats can be skewed any way a person wants to skew them to make something seem factual, relevant or a source of truth simply by highlighting isolated data sets and obscuring others. You can smear lipstick on any pig with enough effort. I think this is a good place to start, because I want to save readers the time and energy of trying to justify what, in my opinion, is a failing/failed concept.
Building a portfolio using the "Power Law" model as a source of truth to do so in early-stage investing (i.e. venture capital) not only makes no sense, it's lazy, it ignores basic fundamental facts, and it is dangerous for investors who trust their money to GPs (General Partners) who "invest" using this portfolio construction logic. Let's dive in.