Power Law Distribution (VC returns)

Biological Parallel

In forest ecosystems, biomass follows a power law: a few massive trees contain more carbon than thousands of saplings combined. One 400-year-old redwood stores as much as 10,000 young trees. This isn't normal distribution—it's multiplicative growth compounding over time, where early advantages (light access, root depth) amplify into exponential divergence. VC returns follow identical dynamics: a few winners don't just outperform, they contain most of the portfolio's value.