The reason for the long-tail bets being improbable is important, though!
If the reason is because it takes lots of capital, or because there are network effects (e.g., AirBnB, eBay), or because it's a winner takes all market, or some key piece of technology has to be proven out, then sure, shoot your shot, someone will get the bullseye and win the day and it'll be a cakewalk raising the next fund.
But if it's improbable because nobody wants it, that's not the same thing.
That's why a bet being improbable should not be the reason to invest in something.
A VC may look at a bet and say, "sure, the win condition is unlikely, but lots of people will want this, so if it wins, it's worth billions." And maybe they write a check.
But if another VC looks at a deal and says "it's not likely to work, and also, even in the optimistic case this is worse than existing solutions," then there is no market problem being solved. This second VC will likely be leaning more on their management fee than their carry to pay the mooring fees for their yacht.
And a phone call to that farmer would have told them that while microgreens don't ship well over very long distances, they do fine in climate controlled trucks over a couple hundred miles. Part of a VC's job is to de-risk investment decisions by validating key assumptions.
If the reason is because it takes lots of capital, or because there are network effects (e.g., AirBnB, eBay), or because it's a winner takes all market, or some key piece of technology has to be proven out, then sure, shoot your shot, someone will get the bullseye and win the day and it'll be a cakewalk raising the next fund.
But if it's improbable because nobody wants it, that's not the same thing.
That's why a bet being improbable should not be the reason to invest in something.
A VC may look at a bet and say, "sure, the win condition is unlikely, but lots of people will want this, so if it wins, it's worth billions." And maybe they write a check.
But if another VC looks at a deal and says "it's not likely to work, and also, even in the optimistic case this is worse than existing solutions," then there is no market problem being solved. This second VC will likely be leaning more on their management fee than their carry to pay the mooring fees for their yacht.
And a phone call to that farmer would have told them that while microgreens don't ship well over very long distances, they do fine in climate controlled trucks over a couple hundred miles. Part of a VC's job is to de-risk investment decisions by validating key assumptions.