I don’t want to put words in your mouth, but I think you might be modeling this as something like “2.5% chance of $4M, 97.5% chance of zero, therefore all numbers should be multiplied by 0.025”, and that’s not correct. E.g. I was rejected from YCombinator, but still had returns roughly similar to what’s estimated here.
I think you might also be implying that the average EA is less qualified than the average YCombinator participant, even conditional on them being accepted to YCombinator. I have less data here, but of the two EA-ish companies I know that went through YCombinator, one had a ~$0 exit, and the other $500 million. At least within this (admittedly tiny) data set, the returns look pretty good.[1]
You list Stripe’s founders as being exceptional, which they surely are, but I could imagine Patrick explicitly earning to give if he had been born 10 years later.
I’m definitely not suggesting a 98% chance of zero, but I do expect the 98% rejected to fare much worse than the 2% accepted on average, yes. The data as well as your interpretation show steeply declining returns even within that top 2%.
I don’t think I implied anything in particular about the qualification level of the average EA. I’m just noting that, given the skewedness of this data, there’s an important difference between just clearing the YC bar and being representative of that central estimate.
Thanks!
I don’t want to put words in your mouth, but I think you might be modeling this as something like “2.5% chance of $4M, 97.5% chance of zero, therefore all numbers should be multiplied by 0.025”, and that’s not correct. E.g. I was rejected from YCombinator, but still had returns roughly similar to what’s estimated here.
I think you might also be implying that the average EA is less qualified than the average YCombinator participant, even conditional on them being accepted to YCombinator. I have less data here, but of the two EA-ish companies I know that went through YCombinator, one had a ~$0 exit, and the other $500 million. At least within this (admittedly tiny) data set, the returns look pretty good.[1]
You list Stripe’s founders as being exceptional, which they surely are, but I could imagine Patrick explicitly earning to give if he had been born 10 years later.
I’m definitely not suggesting a 98% chance of zero, but I do expect the 98% rejected to fare much worse than the 2% accepted on average, yes. The data as well as your interpretation show steeply declining returns even within that top 2%.
I don’t think I implied anything in particular about the qualification level of the average EA. I’m just noting that, given the skewedness of this data, there’s an important difference between just clearing the YC bar and being representative of that central estimate.