The fact that it will likely never be worth that much doesn't change its value. Heading off the foreseen criticism, let's say that savvy investors would only sa

The fact that it will likely never be worth that much doesn't change its value. Heading off the foreseen criticism, let's say that savvy investors would only say it is worth 200MM, the ultimate value times the expectation of realizing it. A market price is a price at which someone with good information is indifferent between going long and short. If you're applying some discount to the $200mm based on the possibility of a $0 outcome, you'd have to put your money where your mouth is and sell short at that level. If you'd made $200mm through some other means, and bought that 20% chance for a billion dollars at the market rate, would you treat that as a loss? At what market value would buying that constitute a good deal? The whole reason we have valuation is to answer questions like that. The question of "What is this worth?" is very different from the question "How much cash can I extract from this now? "What is this worth?" means "What is the net present value of all the cash I can extract from this asset, assuming I extract at the optimal time?" It's the difference between the value of a couple scraps of gold in a creek and the value of a massive gold mine. A final reduction: There is a claimed ROI of ~13:1. Being generous, I would ask this: how many people who invested 1MM into YC have pulled 5MM out? That's not the point, though. Startups are illiquid, so it doesn't make sense to sell. Plus, the YC people just don't seem to need that much money. Some people get rich in order to buy jets and vacation homes--the impression I get is that the YCers got rich enough to spend their time working on cool stuff, e.g. YC.