Everybody has a different approach to building a portfolio, and there is more than one way to make money in venture.

• Some like to take a spray-and-pray approach. Others take a more concentrated approach.
• Some are opportunistic. Others are thematic.
• Some like to operate in emerging markets. Others focus on one specific geography.
• Some make most of their money off of fees. Others make most of their money off of carry.

Your portfolio construction is your fund strategy, and your model will drive the incentives for the fund.

After looking at hundreds of other funds, and playing around with my own strategy more than once, I am pretty opinionated when it comes to this stuff.

Here is how I am building the portfolio for Outlaw …

High-level overview

You can view the full model here.

Built for outliers

Fund I is built to maximize our odds of backing the next generation of world-class companies.

We’re optimizing for:

• A few companies that return 50–100x+
• A handful that return 5–10x
• The rest that return <1x (which is expected)

All of our fund math is designed around that outcome distribution.

I believe that 50 companies is the right number of shots on goal to allow these distribution principles to turn into DPI for the fund and our LPs.