Hsu: Valuation variances up to 50% do not alter early-stage venture returns
Jonathan Hsu · 20VC: Why Historical Loss Ratios Are Simply Too High, Why Data Is The #1 Most Important Piece When Evaluating Effective Reserve Allocation & Why Nothing Is Truly Defensible Today with Jonathan Hsu, Co-Founder and General Partner @ Tribe Capital · Jun 17, 2019 · at 17:52
Jonathan Hsu, General Partner at Tribe Capital, describes why valuation precision is secondary to power-law distribution outcomes in early-stage venture capital.
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“The probability distributions that we're dealing with at the very earliest stage are such that if you're plus or -20, 30, even 40, 50%, it's not going to make or break the result. Either you're going to lose all your money, or you're going to make multiple times your money. There's not a lot in between.”
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