64 How the power law affects your investing with Graham Schwickkard of SyndicateRoom

<p>The power law is something that most venture capital investors are aware of, but usually only in the most general sense. Graham Schwikkard, CEO of SyndicateRoom, has just written a white paper on the topic using their data driven approach.</p><p>We start on a bit of background, discussing what the power law is and what motivated the paper. Graham then explains how they approached the data, what decisions they made in their analysis and why. Fortunately it did show that returns fit a power law!</p><p>We then go into what effect this should have on investors and, most particularly, how they should build a portfolio. We discuss how the characteristics of the power law mean that returns can improve alongside diversification. We also discuss what this says about stock selection and spray and pray approaches. Graham also talks about how different stages of investment give slightly different results and how that influences their investment strategy.</p><p><strong>Links</strong></p><p>SyndicateRoom - <a href="https://www.syndicateroom.com/" rel="noopener noreferrer" target="_blank">https://www.syndicateroom.com/</a></p><p>White paper on the power law - <a href="https://www.syndicateroom.com/invest/whitepaper-power-law" rel="noopener noreferrer" target="_blank">https://www.syndicateroom.com/invest/whitepaper-power-law</a></p><p>Subscribe to the EIS Navigator podcast on most services here: <a href="https://the-eis-navigator.captivate.fm/listen" rel="noopener noreferrer" target="_blank">https://the-eis-navigator.captivate.fm/listen</a></p><p><br></p><p>Suggested book:</p><p><a href="https://www.amazon.co.uk/Food-Lab-Cooking-Through-Science/dp/0393081087/ref=sr_1_1?crid=105LQ5AVKXUHK&amp;keywords=food+lab&amp;qid=1669627740&amp;sprefix=food+lab%2Caps%2C158&amp;sr=8-1" rel="noopener noreferrer" target="_blank">The Food Lab</a> by J. Kenji López-alt</p><p>Brian also mentioned <a href="https://www.amazon.co.uk/Power-Law-Venture-Capital-Disruption/dp/0241356520/ref=sr_1_1?crid=330K8FFKF437V&amp;keywords=the+power+law+sebastia