Thats the main false assumption about venture. Given the stage of venture investing, there is way less true evaluation and understanding of risk going on than they care to admit.
VCs seem perfectly content to point to a power law curve and "admit" that in their view, "true" valuation is impossible and irrelevant, risk is so high most companies are going to fail, so all they care about are the outsized wins. They then turn around and put in a ton of warrant provisions and downside protection anyway, but they at least claim publically that power law rules