Surprising pattern in seed stage VC funds: if a fund is reasonably diversified, it'll need at least one $1b+ exit for a great total fund return. Regardless of fund size.

Doesn't matter if it's a $150m fund buying 15% stakes or a $10m fund buying 1% stakes.

Smaller isn't easier.

Assumptions:
- 50% of fund is for initial checks, 50% for follow-on checks.
- 30 investments.
- 50% dilution over time.
- In 90% of good funds, the top company returns the entire fund by itself. See comment below from a highly regarded fund-of-funds: https://twitter.com/HorsleyBridge/status/657288489331855360

So the top investment is initially 1/60 of your fund, and eventually 1x+ your fund AFTER 50% dilution. For that to happen, the company's valuation has to grow 120-fold. At today's $8m+ seed stage valuations, this kind of multiple means a fund's top investment has to be a unicorn.

You can tweak the assumptions a little (70% for initial checks, 25 investments, etc) so that maybe you can have a great fund w/a $500m exit, but regardess, you need to find a home run.

This is why VCs are always chasing home runs. And why having a great fund return is very hard.