In venture capital a small number of investments can generate most of a fund's returns. A loss is capped at what was invested, while one outlier can return the whole fund and more.
What the film says
In venture capital, one bet can pay for all the others. It's called the power law. Say a fund backs twenty startups. Five million each. A hundred million, all in. Say fifteen go to zero. That's seventy-five million gone. Four just give the money back. Twenty million. Then one breaks out. It returns two hundred million by itself. Two hundred and twenty back, on a hundred. So why do investors care? Most of a return can come from one or two companies. So a fund can lose on most bets, and still do well. Most seeds don't make it. One tree pays for the orchard.
A simple example with round numbers, not advice. Terms vary by fund.
See an error?