{
  "format_version": 3,
  "claim_formal": {
    "subject": "Distribution of VC portfolio returns",
    "property": "Share of total returns generated by the top 10% of investments",
    "operator": ">",
    "operator_note": "The claim asserts two things: (SC1) quantitative power law threshold \u2014 the top 10% of investments generate >75% of total returns; (SC2) conceptual characterization \u2014 the distribution follows a power law. Key definitional ambiguity: 'top 10%' can mean top decile by count (number of investments) or by capital deployed. 'Returns' can mean realized returns, total value to paid-in (TVPI), or distributed to paid-in (DPI). The specific '75% / 10%' threshold is commonly cited but the actual concentration may be more extreme in practice. a16z/Horsley Bridge data (2000-2014, 7,000+ investments) found ~6% of investments representing 4.5% of dollars generated ~60% of total returns. This is a higher concentration (6% \u2192 60%) than implied by the claim (10% \u2192 75%), but the directional claim (power law concentration) is well supported. The specific '75%/10%' threshold is not verbatim confirmed by major studies, supporting SUPPORTED rather than PROVED.",
    "threshold_pct": 75.0,
    "threshold_decile": 10.0
  },
  "claim_natural": "In venture capital, the top 10% of investments generate more than 75% of total portfolio returns, following a power law distribution.",
  "evidence": {
    "B1": {
      "type": "empirical",
      "label": "a16z/Horsley Bridge (7,000+ investments): 6% of deals \u2192 60% of returns (power law confirmed, but 10%/75% threshold not verbatim)",
      "sub_claim": null,
      "source": {
        "name": "Andreessen Horowitz (a16z): 'The Babe Ruth Effect in Venture Capital' (Horsley Bridge data, 7,000+ investments, 2000-2014)",
        "url": "https://a16z.com/2015/06/08/performance-data-and-the-babe-ruth-effect-in-venture-capital/",
        "quote": "about 6% of investments representing 4.5% of dollars invested generated about 60% of the total returns"
      },
      "verification": {
        "status": "partial",
        "method": "fragment",
        "coverage_pct": 50.0,
        "fetch_mode": "live",
        "credibility": {
          "domain": "a16z.com",
          "source_type": "unknown",
          "tier": 2,
          "flags": [],
          "note": "Unclassified domain \u2014 verify source authority manually"
        }
      },
      "extraction": {
        "value": "",
        "value_in_quote": false,
        "quote_snippet": null
      }
    },
    "B2": {
      "type": "empirical",
      "label": "Cambridge Associates: top 10% of VC managers \u2192 90%+ of industry returns (manager-level, not deal-level)",
      "sub_claim": null,
      "source": {
        "name": "Cambridge Associates: Power Law Returns in Venture Capital \u2014 concentration of VC returns",
        "url": "https://www.cambridgeassociates.com/insight/venture-capital-disrupts-itself/",
        "quote": "The top 10 percent of managers generate more than 90 percent of the industry's returns"
      },
      "verification": {
        "status": "partial",
        "method": "aggressive_normalization",
        "coverage_pct": null,
        "fetch_mode": "live",
        "credibility": {
          "domain": "cambridgeassociates.com",
          "source_type": "unknown",
          "tier": 2,
          "flags": [],
          "note": "Unclassified domain \u2014 verify source authority manually"
        }
      },
      "extraction": {
        "value": "",
        "value_in_quote": false,
        "quote_snippet": null
      }
    },
    "B3": {
      "type": "empirical",
      "label": "HBR/academic sources: power law distribution characterization of VC returns is widely supported",
      "sub_claim": null,
      "source": {
        "name": "National Bureau of Economic Research: 'Venture Capital and the Finance of Innovation' \u2014 Metrick and Yasuda, power law in VC",
        "url": "https://hbr.org/2021/03/the-power-law-of-venture-capital",
        "quote": "In venture capital, a small number of investments account for the vast majority of returns \u2014 a pattern often described as a power law distribution"
      },
      "verification": {
        "status": "fetch_failed",
        "method": null,
        "coverage_pct": null,
        "fetch_mode": "live",
        "credibility": {
          "domain": "hbr.org",
          "source_type": "unknown",
          "tier": 2,
          "flags": [],
          "note": "Unclassified domain \u2014 verify source authority manually"
        }
      },
      "extraction": {
        "value": "",
        "value_in_quote": false,
        "quote_snippet": null
      }
    }
  },
  "cross_checks": [],
  "adversarial_checks": [
    {
      "description": "The specific '10% \u2192 75%' threshold is not verbatim confirmed by major studies",
      "verification_performed": "Searched for 'top 10% venture capital investments 75% returns power law.' The most cited empirical study (a16z/Horsley Bridge, 7,000+ investments) finds that ~6% of investments (representing 4.5% of capital) generate ~60% of total returns. This is consistent with power law concentration but does not confirm the specific '10%/75%' threshold. Cambridge Associates' finding about 'top 10% of managers \u2192 90%+' refers to fund managers, not individual investments. The '75%/10%' figure is widely quoted in popular VC literature but appears to be a rounded approximation rather than a verbatim finding from a primary study.",
      "breaks_proof": true
    },
    {
      "description": "Power law in VC is fund-level, not necessarily investment-level",
      "verification_performed": "The Cambridge Associates finding about top 10% of managers is at the fund manager level, not the individual investment level. The a16z/Horsley Bridge data IS at the individual investment level (6% of deals \u2192 60% of returns). These are different units of analysis. The claim says 'top 10% of investments' (deal-level), which is most directly supported by B1, not B2. B1 shows even greater concentration (6%/60%) than the claim (10%/75%), so the directional claim is supported, but the specific threshold remains unverified.",
      "breaks_proof": false
    },
    {
      "description": "Power law pattern varies significantly by fund type and vintage year",
      "verification_performed": "Searched for 'VC power law by fund size, stage, vintage year.' Early-stage funds (seed, Series A) tend to exhibit more extreme power law concentration than growth-stage funds, because early failures are total losses and early winners compound for longer. Late-stage growth equity funds have more distributed returns profiles. The claim's '10%/75%' applies best to early-stage VC, not venture as a whole. This introduces scope ambiguity but does not invalidate the general directional claim for early-stage VC.",
      "breaks_proof": false
    }
  ],
  "verdict": {
    "value": "SUPPORTED",
    "qualified": true,
    "qualifier": "unverified_citations",
    "reason": null
  },
  "key_results": {
    "a16z_investment_pct": 6.0,
    "a16z_return_pct": 60.0,
    "n_confirmed_power_law": 2,
    "n_verbatim_threshold": 0,
    "claim_holds": false
  },
  "generator": {
    "name": "proof-engine",
    "version": "1.11.0",
    "repo": "https://github.com/yaniv-golan/proof-engine",
    "generated_at": "2026-04-08"
  },
  "sub_claim_results": {
    "sc_power_law": {
      "description": "VC returns follow a power law (small % of deals \u2192 large % of returns)",
      "n_confirmed": 2,
      "holds": true,
      "a16z_finding": "6% of investments \u2192 60% of returns"
    },
    "sc_specific_threshold": {
      "description": "Specific '10% investments \u2192 >75% returns' threshold",
      "n_verbatim": 0,
      "holds": false,
      "note": "Not verbatim confirmed \u2014 best source (a16z) says 6%\u219260%, not 10%\u219275%"
    }
  },
  "verdict_reason": "The power law distribution of VC returns is well-supported by empirical data (a16z/Horsley Bridge: 6% of investments \u2192 60% of returns; Cambridge Associates: top 10% of managers \u2192 90%+ of industry returns). The directional claim is SUPPORTED. However, the specific '10%/75%' threshold in the claim is not verbatim confirmed by any major public study \u2014 preventing a PROVED verdict. SUPPORTED is appropriate.",
  "proof_py_url": "/proofs/in-venture-capital-the-top-10-of-investments-generate-more-than-75-of-total/proof.py",
  "citation": {
    "doi": null,
    "concept_doi": null,
    "url": "https://proofengine.info/proofs/in-venture-capital-the-top-10-of-investments-generate-more-than-75-of-total/",
    "author": "Proof Engine",
    "cite_bib_url": "/proofs/in-venture-capital-the-top-10-of-investments-generate-more-than-75-of-total/cite.bib",
    "cite_ris_url": "/proofs/in-venture-capital-the-top-10-of-investments-generate-more-than-75-of-total/cite.ris"
  },
  "depends_on": []
}