You are waisting your breath trying to convince the fanboys here. Their brain cannot grasp the concept that the VC just wants to make money.
To the VC, investing in a startup is equivalent to buying a very out of the money call option. Option theory tells us these are ultra low premium but have immensive upside, so the payoff for the VC is ultra convex and non linear: from 1000 startups, 10 get more than 10 mil valuation, and maybe 1 is a unicorn (i’m making the numbers up but u get the idea). So yes Mr Graham would love for all of the fanboys to work hard since they are literally just options to him, and he has nothing to lose apart from small options.
On the flip side, startup owners are then underwriting options in the form of their life and work, so must be short volatility.
Long story short: dont do startups thinking you will win, think the VC will win
To the VC, investing in a startup is equivalent to buying a very out of the money call option. Option theory tells us these are ultra low premium but have immensive upside, so the payoff for the VC is ultra convex and non linear: from 1000 startups, 10 get more than 10 mil valuation, and maybe 1 is a unicorn (i’m making the numbers up but u get the idea). So yes Mr Graham would love for all of the fanboys to work hard since they are literally just options to him, and he has nothing to lose apart from small options.
On the flip side, startup owners are then underwriting options in the form of their life and work, so must be short volatility.
Long story short: dont do startups thinking you will win, think the VC will win