Is Late Stage the New Early? Behind the Staggering Return of the $1B Venture Fund

In Silicon Valley it's not just who you invest in that matters-- it's also when you invest in them . The earlier the investment, the riskier the bet. But the more jawdropping the returns if the company hits it big. It's so lopsided, that typically just 5% of those unsure early bets create some 95% of the entire venture industry's returns. Miss one of them, and it haunts you for years. Snag it, and you can brag for even longer. This simple reality is precisely what makes the venture business hard, and the justification for why partners make such huge fees. So what's up with the surge of the strongest early stage firms jumping so heavily into late stage mega-deal fray? Have the Valley's superstars lost sight of these rules or are the rules changing? Earlier this year, we wrote a lot about the shift in power at the early stages with the rise of super angels, but you could argue there are far greater ripple effects to this new late stage frenzy. That's not only true for the Valley, it's true for the stock market. And you could argue, those ripple effects are less well-understood.