Since the venture business started in a big way, in the late 1950's, conventional wisdom amongst the pundits and VC's suggested that the game is all about building "portfolio makers." To be successful, VC's had to master the art of investing only in those little acorns that grow into towering oaks, a.k.a. companies with market capitalizations in excess of a billion dollars. The notion that a few huge winners make up for the inevitable losers was based on General Doriot's experience at American Research & Development. In Doriot's case, Digital Equipment and High Voltage Engineering were the home runs that secured his legacy and delivered high portfolio returns. Absent those home runs with the bases loaded, a venture portfolio will fail to be competitive.
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