Charles Hudson, of Precursor Ventures, has written the very good blog post Fund Size Is Still Strategy – The Growing Disconnect Between Founders and VCs.
The saying fund size is strategy comes from the fact that the size of a venture funds strongly impacts check size, ownership target, portfolio construction but also the size of outcome (terminal value) required to move the needle for a venture fund.
One aspect that has become more important as venture firms has raised significantly larger funds ($1 billion vs $100-250 million) is the assumption on terminal value of a company.
If a company in good/great scenarios cannot become really big with $100s of millions in annual revenue in less than 10 years, which supports $1+ billion valuation, it is not an obvious investment for a large venture fund. Regardless of early traction. On this I completely agree with Charles.