Power Law: Why Not Raise Huge Funds? Startup Secrets #shorts

28 Jun 2026 · 0 min

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In this brief interview, Charles Cormier asks why venture capital firms don’t simply raise massive funds, referencing Masayoshi Son’s billion‑dollar fund model. The respondent explains that the power‑law nature of VC returns makes it extremely difficult to generate proportional returns for very large funds. For an Israeli consumer‑focused fund, a size in the tens of millions of dollars is optimal because it allows selective investing and increases the chance that a few portfolio companies become breakout winners with market caps in the hundreds of millions, ultimately delivering outsized fund performance.

Tell me, tell me a bit more, like if the power law is true, why not raise the biggest fund possible, Masayoshi Son style?
Maybe I never got the offer to raise a billion dollars. So maybe, but it's not, but seriously speaking, look, I think it's very hard to return large funds. And I think the right size for a consumer fund in Israel is tens of millions of dollars. Right. I think that gives us a good opportunity to select companies. And I think that again, we, we need to have a couple of winners that will get to hundreds of millions of dollars in market cap and we'll make an unbelievable fund.