1/3 Rule

I was under the impression that far fewer than 2/3rds of VC investments break even. I am more surprised that 1/3rd of them "work out the way you want them to."

Anyone have more concrete statistics on general VC success rates?

Essentially the middle-third (get back 1-to-2x the money back) and the bottom-third (lose money), hence canceling out each other [Assuming that the middle gives just 1x and the bottom loses 100%].

But the top third is expected to make 5-10x. So that gives .333 * 7, (assuming 7x), which is approximately 2.33 times the original money invested.

So every year if the investment is $100 and the eventual return on it is $233, that looks like an awesome deal. Why is everyone not doing it then ?? Whenever any scheme yields more than the long-term-market-average (approx 15%(?)), it is good to ask why and how it works, if it is indeed true. My guess is that there is way more risk involved and the one-third rule is an optimistic view as well as a very simplified theory.

So while it could hold good for a very good VC firm, it might not for every VC firm out there.