When Lightspeed Venture Partners became the first outside investor in Snap, putting in $485,000 and then investing in subsequent rounds, it produced a return of $2 billion and instantly became the stuff of legend. The deal marked Lightspeed’s third exit in quick succession, following the Nutanix IPO and Cisco’s purchase of AppDynamics, making it a giant among venture firms and reinforcing the widely held belief that great VCs can pick winners. The Power Law argues otherwise. Returns in venture capital are distributed according to a Power Law with the lion’s share of returns earned from a small number of investments.