Consider a "soft landing" (VC gets their money back), vs complete death (VC gets no money back). When put alongside a $3B acquisition they're both completely irrelevant, even if on paper the 1x money back is not considered a "failure".
Check size doesn't appear to matter, the data for YC and for VC that I've seen suggests a similar power-law-ish distribution of returns.
I would say that the risk profile is not irrelevant: if you're betting that 1/10 of your investments are returning your fund, then just one miss is the difference between a good year and "I don't have a VC firm anymore". Compare that to betting that half of your investments are returning your fund: one miss is the difference between a good year and an "ehh" year.[0]
That's true; when you compare both of them to a 30x, the difference between a 1x and 0x is small. But what I'm saying is that at a $15m investment, very few VCs expect to see a 30x, and when you compare it vs. a 3x or a 5x acquisition, the difference between no money back and your 1x liquidation pref paying out is much larger, proportionally.
The same power law may apply, but you see more of the tails in when you have a much larger sample size. If there were just as many $15m investments happening as $20k investments, you'd see the same result, but there aren't.
Off-topic: are you the same Scott Klein I talked to over the summer re: statuspage.io?
[0] Of course, that glosses over different probabilities of success and failure, but what I'm trying to say is that VCs are risk averse.
To add to this, the top 10 VC firms make up around 85% of all of the returns of VC firms combined, and the top 15 VC firms make up around 95%. (don't quote me on those specific numbers, but I believe they are roughly accurate based on a report from a16z).
Long story short - very very few VC funds see worthwhile returns. The one's that do are absolutely killing it.
It can't be based on pure charity because that's not a sustainable model, so there's got to be an equity component. But I suspect YC barely breaks even.
Regardless, the way VC measures returns is typically at between 70% and 100% of the life of the fund. If after 7 years, you're getting 1x your money back, that's a pretty big loss considering you could have just put it in an S&P index fund and earned ~7%. Even a 2x return after 10 years isn't that great; you're looking at an equivalent annual interest rate of ~7%. Things don't even get interesting till you start talking 5x or more (~17%). The time component of the equation is very important; the only reason people invest in VC is because it has the potential to provide greater returns than other asset classes if you're patient enough to wait 10 years for the payoff.