A couple of nitpicky things, which I don’t think change the bottom line, and have opposing sign in any case:
In most cases, quite a bit of work has gone in prior to starting the YC program (perhaps about a year on average?) This might reduce the yearly value by 10-20%
I think the 12% SP500 return cited is the arithmetic average of yearly returns. The geometric average, i.e. the realized rate of return should be more like 10.4%
#1 seems like a bigger deal if the optimal strategy is to do some startup work, then discontinue if you’re not in the top 2 percent as evaluated by YC (because that assessment heavily updates your EV). Presumably there is some cost there—at a minimum, the discontinuers could have been earning-to-give at a higher-paying job during that time. So I think the analysis could critically hinge on how accurately one can gauge their odds of being in the top 2 percent in a low-cost manner.
A couple of nitpicky things, which I don’t think change the bottom line, and have opposing sign in any case:
In most cases, quite a bit of work has gone in prior to starting the YC program (perhaps about a year on average?) This might reduce the yearly value by 10-20%
I think the 12% SP500 return cited is the arithmetic average of yearly returns. The geometric average, i.e. the realized rate of return should be more like 10.4%
#1 seems like a bigger deal if the optimal strategy is to do some startup work, then discontinue if you’re not in the top 2 percent as evaluated by YC (because that assessment heavily updates your EV). Presumably there is some cost there—at a minimum, the discontinuers could have been earning-to-give at a higher-paying job during that time. So I think the analysis could critically hinge on how accurately one can gauge their odds of being in the top 2 percent in a low-cost manner.