You have it backwards. The Pareto principle is based on a Pareto distribution with specific coefficients. The Pareto distribution is a power law distribution.

You have it backwards. The Pareto principle is based on a Pareto distribution with specific coefficients. The Pareto distribution is a power law distribution. Ergo the Pareto principle is based on a power law distribution. There is nothing stepwise about a Pareto distribution. Maybe VC returns follow 80/20 and maybe they don't. It isn't exactly a public dataset that we can readily get our hands on. The point I was trying to make in my original comment was that although power law distributions seem to be a popular topic of conversation for the past few years, they aren't exactly a new discovery. Given that wealth and income follow a Pareto distribution, perhaps it isn't that surprising that VC returns do too.