I like this idea. One danger (in both directions) with comparing to VC is that my impression is venture capital is way more focused on prestige and connections than funding charities is. In particular, if you can successfully become a prestigious, well-connected VC firm, then all of the Stanford/MIT students (for instance) will want you to fund their start-up, and picking with only minimal due diligence from among that group is likely to already be fairly profitable. [Disclaimer: I’m only tangentially connected to the VC world so this could be completely wrong, feel free to correct me.]
If this is true, what should we expect to see? We should expect that (1) VCs put in less research than OpenPhil (or similar organizations) when making investments, (2) hits-based is very successful for VC firms conditioned on having a strong established reputation. I would guess that both of these are true, though I’m unsure of the implications.
I like this idea. One danger (in both directions) with comparing to VC is that my impression is venture capital is way more focused on prestige and connections than funding charities is. In particular, if you can successfully become a prestigious, well-connected VC firm, then all of the Stanford/MIT students (for instance) will want you to fund their start-up, and picking with only minimal due diligence from among that group is likely to already be fairly profitable. [Disclaimer: I’m only tangentially connected to the VC world so this could be completely wrong, feel free to correct me.]
If this is true, what should we expect to see? We should expect that (1) VCs put in less research than OpenPhil (or similar organizations) when making investments, (2) hits-based is very successful for VC firms conditioned on having a strong established reputation. I would guess that both of these are true, though I’m unsure of the implications.