General Partners (GPs) prioritize speed and certainty when allocating co-investment opportunities. LPs who build a reputation for fast, reliable decision-making can punch far above their weight, gaining access to deals disproportionate to their fund commitment size.

Limited Partners should resist pressuring VCs for early exits to lock in DPI. The best companies compound value at incredible rates, making it optimal to hold winners. Instead, LPs should manage portfolio duration and liquidity by building a balanced portfolio of early-stage, growth, and secondary fund investments.

While the market trends toward sector specialization, LPs should maintain a significant allocation to generalist VCs. These funds are uniquely positioned to invest in outlier founders and "weird" ideas that don't fit into a specific thesis, which are often the source of the greatest returns.

Even with big wins, a venture portfolio can fail if not constructed properly. The relative size of your investments is often more critical than picking individual winners, as correctly sized successful investments must be large enough to overcome the inevitable losers in the portfolio.

Top growth investors deliberately allocate more of their diligence effort to understanding and underwriting massive upside scenarios (10x+ returns) rather than concentrating on mitigating potential downside. The power-law nature of venture returns makes this a rational focus for generating exceptional performance.

Acknowledging venture capital's power-law returns makes winner-picking nearly impossible. Vested's quantitative model doesn't try. Instead, it identifies the top quintile of all startups to create a high-potential "pond." The strategy is then to achieve broad diversification within this pre-qualified group, ensuring they capture the eventual outliers.

Co-investing offers 'structural alpha.' By participating in average deals with average private equity managers but without paying management fees or carried interest, an LP's returns are mathematically lifted to a top-quartile level. This inherent advantage exists before any deal-specific underwriting.

Oren Zeev argues that LPs should seek diversification across their portfolio of GPs, not within a single fund. He believes GPs should be concentrated in their best deals to maximize returns, noting that concentration limits at the fund level don't benefit LPs who are already diversified across many managers.

VC outcomes aren't a bell curve; a tiny fraction of investments deliver exponential returns covering all losses. This 'power law' dynamic means VCs must hunt for massive outliers, not just 'good' companies. Thiel only invests in startups with the potential to return his whole fund.