3x Rule (VC returns)

Biological Parallel

R-selected species like cod produce millions of eggs knowing 99.9% will die—each survivor must compensate for thousands of failures to maintain population. The 3x return requirement reflects identical portfolio math: given high mortality (90% of startups fail), each winner must return enough to cover its own cost plus 9 dead siblings. Dandelions produce 2,000 seeds annually, needing only 2 to survive for replacement, but evolutionary pressure selects for massive overproduction. The 3x threshold is the minimum reproductive output required when operating in high-mortality environments.