> Juicero

Huge margin, going for rich, health conscious consumers - great investment on paper. Shitty due diligence by investors who thought they could grade the investment by the numbers and not by the actual hardware, juice bags, etc.

> Peloton

Taking a commoditized product and differentiating with a premium offering offering high margins is literally a phenomenal investment, if you can find a market for the premium offering and can build a moat. Pharmaceutical companies do this all the time with drugs that are about to lose patent protection, put in a little tweak, get the patent moat back, market the hell out of it to get doctors to prescribe it instead of the suddenly cheap generic version.

> WeWork

You literally described a way to buy low and sell high, taking advantage of latent inefficiency in the market due to misaligned incentives on the part of real estate owners vs. short-term tenants. Basically run hotels but for entrepreneurs instead of tourists. Sounds like a pretty phenomenal investment to me! Too bad the CEO was unstable and let valuations run out of control.

> Social media

Facebook specifically actually was a pretty stupid investment. FB didn't just have a ton of users who hated ads, it had a CEO who foreswore ever deploying advertising, whose board structure kept him from ever getting fired. Pretty sure early FB investors are thankful that some business sense was knocked into Zuck before they went bankrupt.

Twitter, on the other hand, was a far better investment. If you can get strangers to talk to each other, you can get people to talk to brands. Of course that's valuable.

Yes, but they don't know which ones. What the commenter meant is that the VC believes each and every one of their investments has the potential to become a rocketship. So they spread the risk into several potential rocketships and hope for one of them to not crash.

Gamblers often have various reasons for continuing to gamble, but very few of them EXPECT their next hand to be a royal flush. For most of them it is exactly the case that 'if I keep going, eventually I will get a big win that offsets my losses'.

That I suppose is a type of taking risk, but I think OP was not being quite as blunt.

In a situation where you have 10 companies each with a 1/10 chance of 20x growth (and a possibility for better) or 1000 companies, each with 1/1000 chance of 5000x growth, which would you pick?

While theoretically, the two situations are similar, and given an infinite amount of money and investment opportunities, the second situation pays off better, the first is more likely to yield returns in the real world. Most people would probably call the first one 'taking risk' and the second 'gambling'.