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Ron Conway alone disproves your thesis. Some people are just very good. Some prescriptions are also very good, like Sequoia or Kleiner Perkins. And the success
by barry-cotter 7y ago
Ron Conway alone disproves your thesis. Some people are just very good. Some prescriptions are also very good, like Sequoia or Kleiner Perkins. And the success of the good is not purely Matthew Effect, rich gets richer stuff, as Andreesen Horowitz shows. If you’re good enough you can go from not a VC firm to top 5 VC firm in under five years.
- MiroF 7y agoIn no way do these people disprove the argument or other EMH-like arguments (efficient market hypothesis). In many random distributions, if you sample enough you're going to get outcomes at the tails.
- pmoriarty 7y agoHow can the EMH be falsified?
- barry-cotter 7y agoThat would imply mean reversion. Investors who have been successful in the past should be no more likely than average to be successful in the future. That is not what we observe in VC.
- momentbruh 7y agoYou do not understand probability.
- barry-cotter 7y agoHere’s an explanation in terms of folk probability. Ron Conway is playing poker, not roulette. He’s exposed to many opportunities and he chooses the ones he thinks are good bets. He earns far higher returns than he would if he picked randomly from the set of opportunities he is offered. The difference between him and the average angel investor is due to skill. No doubt he makes many bad bets but he is on the far, far right tail of investor returns for angel investments and has been for decades.