Narrative Violation : “Don’t invest in MBAs” If you just invested in the HBS Class of 2011, you would have hit $100B+ in market cap. - Coupang: $60B - Grab: $17B - Gojek: $10B - Oscar Health: $7B - Stitchfix: $5B Lesson? Don’t make up “proxy rules” in a game of outliers.
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If all 1000 people started a startup in the class (and every other went to 0), it’d be a $100M exit on average for each co. Seed was more reasonable 10 years ago so entry point probably averaged $5M post? Even w/ 50% dilution, its 10x across the board. What am I missing PG?
The dilution would be more like 2/3, so 6x if you could get into these cos at 5m. Which is still good. The overall returns are dominated by 1 co though, which can yield weird conclusions. E.g. you'd do much better if your rule was to invest only in HBS dropouts.
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It's kind of weird to assume that every person in the class started a company. You'd only have to fund the ones that did want to start companies. If I remember correctly the stats were 10-15% started companies right after graduating, but rose to 50% within 10 years.
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There’s no way 50% start a venture backed tech startup. Maybe 50% start a business, but a lot of those are consulting or SMB or funds of some sort, many super successful, but not tech startups you can invest in.
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Fair. If you went 2 years back, you'd also pick up Cloudflare, Rent the Runway, Blue Apron, Birchbox, Plated. The original conclusion was don't decide to NOT invest because of an MBA (which I stand by). I wouldn't say TO invest because of an MBA. I like your rule as well.
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I know of no investor who wouldn't fund a startup because one of the founders had an MBA though, so if that's your point, everyone already agrees with you.
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Venture returns have always been driven by outliers
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