Module 2
Build a Fund
Every fund is a bet on a shape: wide and shallow, or narrow and deep. Adjust the construction and watch the concentration risk shift.
Portfolio Construction
25 initial checks of $1.0M each, $25.0M held in reserve (50.0% of the fund).
Concentration Risk
4.0%
share of returns from your single largest position, if it wins
Diversification Score
96 / 100
higher means more shots on goal, smaller each
Expected Return Range
1.3x – 4.6x
illustrative MOIC band for this construction
Per-Company Reserve
With 50.0% held back, each initial position can receive up to $1.0M in follow-on capital if it takes off — before the fund needs a new source of money.
Why This Matters
Portfolio construction sets the ceiling and floor of a fund before a single dollar is invested. Too few bets and one failure sinks you; too many and your winners get diluted across too many small checks.
Common Misconception
More investments always means less risk. In venture, spreading too thin means you can't write meaningful follow-on checks into your winners — and winners are where the returns live.
Key Takeaway
The right number of bets balances your odds of finding a breakout against your ability to double down when you find one.