For every 50 million USD VCs raise from their LPs they need a 2 billion USD Exit or else VCs wont even break-even. So VCs only give each startup ~1 million USD from above 50 million, and every bet a VC makes they have to convince themselves that the startup will have a 2 billion USD exit. Of course that rarely happens. Most startups go bust. They hope for such a large exit because of dilution

So VCs naturally select businesses which are like tobacco: i.e. high Dopamine hit from addiction. It is a self selection of ideas which obey the power law. There is plenty of tech and art that doesn’t fit into the power law but they never see the light because VCs need the power law to exist to make the business model work.

High productivity rarely leads to 2 billion dollar exit IMO, unless it is high productivity due to cheap energy, work from home communications during pandemic, vaccines during pandemic and other special scenarios.

This is why startup unicorns are like Netflix because people will pay anything for quick dopamine hit from not having to wait for a torrent movie to download. Facebook /Instagram/YouTube/Spotify etc is the same, people will watch any ad to get dopamine.

Most of startup tech unicorns are just a dopamine quick satisfaction gimmick. quick credit, quick payments, etc.

VC business model wont work with a normal distribution. VCs create a self fulfilling prophecy of the power law, because that is the only law that can make their business with LPs profitable.