Why VCs need huge outcomes, and what it means for your pitch
An idea from Andy Rachleff (Benchmark, Wealthfront) · Updated 2 October 2026
More from Bill Gurley and Benchmark
Short answer
Venture returns come from very few companies. Andy Rachleff, co-founder of Benchmark, wrote in 2014 that only about 15 technology companies a year, plus or minus 3, ever reach $100 million in revenue, and that 80% of a typical fund's returns come from 20% of its investments. So investors look for companies that could be one of the few, not companies that are likely to be fine.
The numbers
All three come from Andy Rachleff's 2014 post on venture economics.
- About 15 technology companies a year, plus or minus 3, reach $100 million in revenue at some point.
- 80% of a typical venture fund's returns come from 20% of its investments, citing research by William Sahlman.
- The top 20 venture firms, out of about 1,000, generate about 95% of the industry's returns.
What it means for you
A good, steady business can still be a pass for a venture investor, because it can't move the fund. Your deck has to make the case that yours could become one of the very few big outcomes, not just that it will work.
In your deck
Your market slide is where this case is made: how big this can get, not just how big the category is today.
Read the originals
- Demystifying venture capital economics, part 1 · Andy Rachleff (Wealthfront)
Why venture returns come from a handful of companies, and why being right and non-consensus is the only way to outstanding returns.
Questions founders ask
- Why do VCs only want billion-dollar companies?
- Because returns are concentrated. Andy Rachleff wrote that 80% of a typical fund's returns come from 20% of its investments, so a fund needs companies that can become very large.
- How many startups reach $100 million in revenue?
- About 15 technology companies a year, plus or minus 3, according to Andy Rachleff's 2014 analysis.
- Is a profitable small business a bad fit for venture capital?
- Often, yes. It can be a great business and still not return a venture fund, which is why many VCs pass on it.
Get your deck reviewed the same way.
Comments on every slide, the words to change highlighted, and the 3 fixes that matter.
Keep reading
- Rachleff's law: why market beats team and product
Rachleff's law of startup success, as Marc Andreessen wrote it down: the number one company killer is lack of market. What it means for your deck.
- Non-consensus and right: why the best startups look wrong at first
Andy Rachleff on why outstanding returns need ideas that are right and non-consensus, and Howard Marks on why they feel lonely at first.
- How to show market size in your pitch deck
What the market slide must prove, why TAM, SAM and SOM say little on their own, and Gurley on not capping your market at today's size.
- The single miracle: why your startup should need exactly one
Elad Gil's rule that a startup should need one miracle, not zero and not several, and Sam Altman's version. How to name your miracle in your deck.