Ah, but in order to get that 100x they have to also invest in a larger number of startups, because of all the ones that look promising, they don't know which on

Ah, but in order to get that 100x they have to also invest in a larger number of startups, because of all the ones that look promising, they don't know which ones will actually succeed. So their expected return is actually increased -- probably quite substantially -- by requiring traction. Not insane at all.