The power law is the most quoted idea in angel investing, and it’s also the most misunderstood.

Cheryl Kellond is back to dismantle it. VCs took a principle from nature, one big winner can dwarf everything else, and twisted it into a rule that only ten billion dollar outcomes count. The result is angels sitting on the sidelines, convinced they need to find the next Uber before writing a single check.

The math tells a different story. Around ninety percent of startup exits happen under $100 million, with the median sitting near $44 million. Get in early at a $5 million post-money valuation and a $50 million exit is a monster multiple. Thirty bets turns angel investing into a predictable, high-performing asset class that beats public markets without ever touching a unicorn.

The sharpest turn comes late, when Cheryl defends the VCs Andy just put on trial. VCs aren’t villains, they’re doing the job their LPs pay them to do. The mistake is angels thinking that job is theirs too. It isn’t. Angels have different math, different incentives, and a very different definition of winning.

Episode outline.

Where the power law actually comes from: nature, not venture capital, and how VC twisted a proportionality principle into an absolute dollar figure
The fund size trap: why VCs pass on companies that could return a huge multiple, purely because the exit won’t repay the whole fund
The magic number thirty: Abe Othman’s AngelList data on when a portfolio starts behaving like an asset class instead of lottery tickets
The exit math nobody shares: ninety percent of exits land under $100 million, and they happen faster and at lower risk
The power shift problem: how each VC round hands exit decisions to stakeholders optimizing for their own multiplier, not the founder’s
Role reversal: Cheryl defends VCs as professionals doing their job, and lands the real lesson, angels are not small VCs

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Andy Walsh - https://www.linkedin.com/in/anwalsh/
2x exited founder and host of Startups Decoded (Top 2% globally). Andy helps founders sharpen judgment and build companies through earned experience and operator insight.

Cheryl Kellond - https://www.linkedin.com/in/c2kprofile/
Founder of Play Money and active angel investor. Cheryl focuses on democratizing angel investing and helping new investors build diversified portfolios while supporting founders with practical guidance and community.

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