> Suppose instead you split that investment between 10 companies at a tenth the valuation. How confident do you have to be that any given one will become a bill

> Suppose instead you split that investment between 10 companies at a tenth the valuation. How confident do you have to be that any given one will become a billion dollar company? You'd have to be more confident in aggregate. Let's say in the former case you have a 50% certainty with one company; and in the latter case you have 5% confidence with each of 10 companies. The chance that NONE of them succeed to that degree is 0.95^10, or about 60%. So only a 40% chance someone will make it, vs. 50% for the former. With smaller probabilities the difference is less, but guesstimating at billions is such a crapshoot. How about something more realistic? How about doubling your money: Let's say you put $1 mil into the former company. If it doubles its worth, you've doubled your money. But in the $100k for each of 10 companies case, they all have to double their worth, or one has to grow 20x. Let's say you think it's a 50% safe bet in the former case, but a whopping 90% chance in the smaller cases. The chance they ALL double up is 0.90^10, or about 35%. So you're probably losing money. Sure, some might do 3x or 4x to make up for a couple of the flops, but you probably aren't going to let a 100k investment just die; you'll be sinking more into the money losers, so the successes have to do even better to make up for the bailouts.