When we further take into account that not all startups reach the point of getting venture capital funding (although Sam’s track record at Google suggests he is relatively apt), the risk-adjusted returns of a startup stake may be in the same ballpark as remaining a salaried employee, despite much higher unadjusted expected returns.
That seems silly to me; it neglects value of information from trying a startup.
You’re not deciding between “do a startup for the rest of ever” versus “be an employee for the rest of ever”. You could for instance do a startup for two years and then quit if you don’t get VC funding.
Well, in any efficient market model, the risk-adjusted returns would have to be the same. And if you don’t have an efficient market model, how are you measuring risk-aversion?
That caught by eye too, but they address it:
That seems silly to me; it neglects value of information from trying a startup.
You’re not deciding between “do a startup for the rest of ever” versus “be an employee for the rest of ever”. You could for instance do a startup for two years and then quit if you don’t get VC funding.
Well, in any efficient market model, the risk-adjusted returns would have to be the same. And if you don’t have an efficient market model, how are you measuring risk-aversion?