--- title: "Meaning & Key Takeaway of: This implies two very strange rules for…" description: "\"“This implies two very strange rules for VCs. First, only invest in companies that have the potential to return the value of the entire fund. This is a..." image: "https://sms4smile.com/quotes/i/79a/peter-thiel-1311_customer_this-implies-two-very-strange-rules-for_2398074.png" --- # This implies two very strange rules for VCs. First, only… ![“This implies two very strange rules for VCs. First, only invest in companies that have the potential to return the value of the entire fund. This is a scary rule, because it eliminates the vast majority of possible investments.” quote by Peter Thiel](https://sms4smile.com/quotes/i/79a/peter-thiel-1311_customer_this-implies-two-very-strange-rules-for_2398074.png) [Download](https://sms4smile.com/quotes/i/79a/peter-thiel-1311_customer_this-implies-two-very-strange-rules-for_2398074.png) [Open image](https://sms4smile.com/quotes/i/79a/peter-thiel-1311_customer_this-implies-two-very-strange-rules-for_2398074.png) > ““This implies two very strange rules for VCs. First, only invest in companies that have the potential to return the value of the entire fund. This is a scary rule, because it eliminates the vast majority of possible investments.”” [Peter Thiel](https://sms4smile.com/quotes/author/peter-thiel/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. VCs should aim for outsized returns, but such a rule excludes most startups, limiting diversity. **In simple terms:** VCs chase huge returns, ignoring most firms. Key Takeaway Balance high‑risk bets with broader portfolio. Themes venture capital investment strategy risk Mood analytical critical Type business strategic When to use this quote - startup funding - angel investing - fundraising Key Concepts portfolio theory return optimization Questions to Reflect On - How can VCs support more varied ventures? - What criteria could broaden investment scope? A Different Perspective High returns are rare; many viable ideas are missed. ★ ★ ★ ★ ★ No ratings yet [Customer](https://sms4smile.com/quotes/about/customer/) [Entire Fund](https://sms4smile.com/quotes/about/entire-fund-5054400/) [Invest Companies](https://sms4smile.com/quotes/about/invest-companies-1644120/) [Investing](https://sms4smile.com/quotes/about/investing/) [Possible Investments](https://sms4smile.com/quotes/about/possible-investments-5996416/) [Rules Vcs](https://sms4smile.com/quotes/about/rules-vcs-5996415/) [Vcs Invest](https://sms4smile.com/quotes/about/vcs-invest-3368709/) ## Related quotes > [First, only invest in companies that have the potential to return the value of the entire fund.](https://sms4smile.com/quotes/peter-thiel/first-only-invest-in-companies-that-have-the-potential-to-return-the/) [Peter Thiel](https://sms4smile.com/quotes/author/peter-thiel/) > [“As VCs invest more and more money in each company, they have to wait longer and longer before they can exit.”](https://sms4smile.com/quotes/basil-peters/as-vcs-invest-more-and-more-money-in-each-company-they-have-to-wait/) [Basil Peters](https://sms4smile.com/quotes/author/basil-peters/) > [VCs invest in innovation and disruption, but how often do they innovate themselves?](https://sms4smile.com/quotes/brock-pierce/vcs-invest-in-innovation-and-disruption-but-how-often-do-they/) [Brock Pierce](https://sms4smile.com/quotes/author/brock-pierce/) > [I always invest in companies an idiot could run, because one day one will.](https://sms4smile.com/quotes/warren-buffett/i-always-invest-in-companies-an-idiot-could-run-because-one-day-one/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [Our criteria is that it's okay to invest in companies so long as they stop lobbying in Washington, stop exploring for new hydrocarbons, and…](https://sms4smile.com/quotes/bill-mckibben/our-criteria-is-that-it-s-okay-to-invest-in-companies-so-long-as-they/) [Bill McKibben](https://sms4smile.com/quotes/author/bill-mckibben/) > [The stock market has gone up and if you are stock picking, that's fine, you may do a bit better than the market. 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