What would failure-rate adjusted valuations of startups look like? VC-firm-level returns are meaningful, but it’s weird that individual valuations are a vanity metric. Valuation: price at which you sell a % to a private group that is expecting median investment to be worthless.
You’re mapping “player” to “VC”, I’m mapping it to “startup” Nobody but VCs and LPs gives a shit about how well they do. Startupball as a grand narrative is about the startups and their hero’s journeys.
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The VCs are the people on the sidelines estimating the chops of the player. The player is the founder of the startup, or the startup more broadly. We can look at the results to estimate their merit, or we can look at the expert-derived expected average. Tradeoffs seem analogous.
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Particularly if our one-shot is in a game like Magic or poker, which seem more analogous to a startup struggling for survival than more deterministic games, it would be downright foolhardy to take the one actual result over people's estimate of how good the player is.
End of conversation
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It’s basically BIRGing *average* returns in a power-law sector where *median* returns are more meaningful but far less flattering.