A brief history of your investors (and their investors)

It seems there might be some circularity in the bipolar returns and the "therefore, we have to bet on 1000x winners" mentality. If every bet is a huge one, a bipolar distribution is what you'd expect to get, isn't it?

Just a guess, but I wonder if that's partly due to the relatively low capital needs for technology startups compared to some other businesses. Maybe the mid-range profitable companies, the sort that will plateau at $1m/year profits with 5 employees, just aren't seeking VC funding at all, because they have enough in savings/friends/family funding to get off the ground?