I think this implies some breakdown of efficient market in startup valuations, like saying that EAs are (much?) better at picking startups than top 10% of VCs or so.
I sort of agree with this personally, but I think many other financially literate EAs who I respect disagree (and also others who believe this much more than I do); I’m not sure why, and it’d be good to know where the cruxes are.
I have a draft part 2: it’s easier than it sounds. One of the reasons I believe that is because many of the best-of-the-best startups have many vc’s that want to fund them (so it’s not as hard for them to identify which are the best, but it is hard for them to compete to be the one to fund it). On the other hand, these startups need all the excellent employees they can get.
One EMH-obeying way you can estimate whether the “market” expects a startup to grow is tracking the valuation:# employees ratio. Startups that are highly valued per capita means either each employee is already responsible for a lot of revenue growth (with some asterisks) or the market expects large revenue growth.
This isn’t helpful if you want a large payout, but is very helpful from a career capital perspective, assuming billzito’s model is correct.
I think this implies some breakdown of efficient market in startup valuations, like saying that EAs are (much?) better at picking startups than top 10% of VCs or so.
I sort of agree with this personally, but I think many other financially literate EAs who I respect disagree (and also others who believe this much more than I do); I’m not sure why, and it’d be good to know where the cruxes are.
I have a draft part 2: it’s easier than it sounds. One of the reasons I believe that is because many of the best-of-the-best startups have many vc’s that want to fund them (so it’s not as hard for them to identify which are the best, but it is hard for them to compete to be the one to fund it). On the other hand, these startups need all the excellent employees they can get.
One EMH-obeying way you can estimate whether the “market” expects a startup to grow is tracking the valuation:# employees ratio. Startups that are highly valued per capita means either each employee is already responsible for a lot of revenue growth (with some asterisks) or the market expects large revenue growth.
This isn’t helpful if you want a large payout, but is very helpful from a career capital perspective, assuming billzito’s model is correct.