In an article about how unicorns were descending into “zombies,” The New York Times reported an extraordinary statement: “ Venture investors say that failure is normal and that for every company that goes out of business, there is an outsize success like Facebook or Google . ” Really?

For every VC-funded company that goes out of business, is there really an outsize success like Facebook or Google? Who are these investors with this track record?

Harvard cites research suggesting that up to 75% of startups fail . If failure is that common, how many Facebook- or Google-sized home runs are there really? The statement does not mean that half of VC-funded ventures become Facebooks or Googles. There can be many ventures between failure and outsize success.

But it does raise a fascinating question: How many genuine home runs do VCs finance? The answer matters to entrepreneurs because “successful investment,” “home run” and “successful venture” can mean very different things.

How Many Home Runs are There?

Marc Andreessen, one of the best-known venture capitalists, has offered some remarkable numbers. He estimated that approximately 4,000 U.S. startups each year might plausibly qualify for venture capital and that the best VCs collectively finance about 200. Of those 200, Andreessen estimates that about 15 generate more than 90% of the investment profits for the entire year. The best VC firms may capture only two or three of those 15. His conclusion: even the best VCs miss most of the big winners .

That looks very different from one Facebook or Google for every company that fails. But there is another complication: What exactly is a successful VC investment?

Success is Not the Same as a Home Run

A venture can be successful for an entrepreneur without being a home run for a VC. And an investment can meet a researcher’s definition of VC success without becoming anything remotely comparable to Facebook or Google. And in moderate successes, investors may earn reasonable returns even when founders have been substantially diluted. A successful VC investment does not necessarily mean a successful financial outcome for the entrepreneur .

A landmark 2026 NBER study by Blake Jackson and Stanford University Professor Ilya Strebulaev examined more than 100,000 professionals affiliated with U.S. VC firms. Fewer than 40% of VCs with investments were ever credited with a successful investment. Even more striking, just 5% of VCs generated 90% of investment profits.

The researchers also found differences in investor-specific skills. And achieving superstar status increased access to highly valued startups.

The Double Concentration of VC

There are two remarkable levels of concentration:

  • a small number of ventures generate a disproportionate share of VC returns, while
  • a small number of VCs generate a disproportionate share of VC profits.

That raises an important question for entrepreneurs seeking VC: Is getting venture capital enough – or do you need to get it from the right VC?

To understand why home runs matter so much, consider how VCs measure performance. A VC is not simply trying to turn $1 into $10. Time matters.

  • A 10X return in five years represents an annual compounded return of approximately 58.5%.
  • A 10X return in 10 years represents an annual compounded return of only about 25.9%.

This highlights a fundamental difference between the financial objectives of VCs and entrepreneurs. VCs manage portfolios and funds with finite lives. They seek high annualized returns across the portfolio, despite the investments that fail or underperform.

Entrepreneurs can have different objectives. They can seek to maximize the amount of wealth they create and, importantly, the share of that wealth they keep. An entrepreneur who turns a relatively small investment into a valuable company over 15 or 20 years may become extraordinarily wealthy, especially if the entrepreneur is earning a reasonable annual salary. But that same trajectory may not generate the annualized return or exit timing or liquidity event sought by a VC fund.

Both want growth. But they may not be optimizing the same financial outcome.

This helps explain one of the defining characteristics of venture capital. If approximately 15 investments among the 200 financed by the best VCs can generate more than 90% of annual investment returns, VCs cannot simply search for good businesses. They need potential outliers.

That gives VCs strong incentives to seek huge potential markets, emerging trends, disruptive technologies and ventures capable of explosive growth. It also helps explain some of the exuberance and publicity surrounding hot sectors. If one extraordinary winner can compensate for many disappointing investments, missing the next Facebook, Google or Nvidia can be more consequential than financing ventures that ultimately fail.

Andreessen’s numbers make another point especially important. Getting financed by a top VC does not mean that a venture will become a home run. If roughly 15 of the 200 investments made by top VCs generate most of the returns, most ventures financed by top VCs are not among the biggest winners. And the NBER/Stanford evidence suggests that VC investment performance itself is highly concentrated.

What Should Entrepreneurs Learn?

First, understand what VCs are optimizing . A VC needs high annualized portfolio returns. Entrepreneurs should consider the wealth they create, the wealth they keep, and the control they retain because the control they have can influence the success they achieve.

Second, distinguish between failure, success and home run . A company does not have to become Facebook or Google to be an enormously successful venture for its Founder-CEO. Conversely, being classified as a “successful investment” does not mean that it was a Facebook-sized home run – or that the entrepreneur received a proportionately successful financial outcome.

Third, don’t confuse VC rejection with market rejection . Even Andreessen says the best VCs miss most of the big winners. And Steve Jobs was rejected by 10 of the best VCs . Learn how to get market acceptance if you really want VCs to seek you out. That’s what Jeff Bezos did.

And finally, don’t make getting VC the objective . Ask instead: Do you need VC? When do you need it? How much do you need? Which VC can add value? And what will the capital cost you in ownership and control? If you raise VC before proving your leadership potential and strategic fit , you can surrender substantial ownership and strategic control before you know how much capital you actually need.

MY TAKE: Your objective should not be to avoid VC. Nor should it be to chase VC.

Your objective should be to understand the economics of capital well enough to make capital serve the venture and you – not make the venture serve the capital.

Finance-Smart entrepreneurship means making capital serve the venture and the Founder-CEO – not making the venture serve the capital. Finance smart. Keep control. And when you need VC, control the VCs.