Unpopular opinion: TC shouldn't include paper money
Oct 26, 2021
16 Comments
I saw that many people on blind include paper stocks in their TC. Some people even include increased valuation of their paper money based on their last funding round. Should people still include paper money in TC? I feel like it leads to incorrect comparisons between roles/companies.
TC 380
comments
According to this, 80% fail, 20% IPO / get acquired. It’s actually much more grim according to the below chart. Not as bad as “99%” but late stage doesn’t guarantee an exit
I think it's possible to use current operating models to predict whether it'll succeed - and you'll need maybe a series A/couple years of history to truly be able to tell. While I think most VCs are mediocre at this, (skewing statistics again) I think it's possible to be 80% accurate in your predictions.
I'm trying to build a portfolio myself, let's see if I can learn that skill
Keep a margin of how much that paper money can go down( or up) and calculate TC accordingly.
Like for MSFT/AAPL 85% of total value in your Tc
For TSLA 200% of total value
For FB 40% of total value … etc