It's a numbers game. Let's say that 99% of your investments flop. That means the 1% of successful investments have to make up for all of the losses from the others (and earn a return). To earn a total return of Y%, you need that 1% of investment to earn (100+Y)x returns. If you want to do this annualized over a 5 or 10 year investment, the required return jumps dramatically (and you start talking about 1000x deals)