A fund that gets 1% unicorns might be successful, one that gets 1% unicorns and 5% big companies still has an advantage.
Which fund would you invest in?
Given the same investments in each, the unicorn provides a bigger return. Because of economies of scale, it's more likely to gain traction and continue its success, especially in a place like tech where marginal cost is almost non-existent. Not to mention the overhead on managing a single investment vs. many. Not to mention the administrative costs of 5 companies vs one. Not to mention the benefit of choosing a company based on your interests and abilities, since most VCs have a more hands-on role than traditional investors.
It just aligns with the culture; the whole idea in most tech startups is to leverage economies of scale as much as possible. Often their profit per customer is tiny. They're relying on millions of people using the product.
No as an individual investing in VCs.
VC A invests in 100 companies, 1 turns into a unicorn, 99 go bust.
VC B invests in 100 companies, 1 turns into a unicorn, 5 turn into (slightly less) large successful companies, 94 go bust.
A Facebook trumps a portfolio of LinkedIn, Tumblr, Snapchat, Box, Nest anyday.
Unicorn _and_ 5 big companies.
A portfolio of Facebook _and_ LinkedIn, Tumblr, Snapchat, Box, Nest would trump both.