I assure you that statistics do not show it is best to value equity at 0.

guappa · 2025-04-14T09:56:19 1744624579

Care to show your source?

aetherson · 2025-04-14T14:00:04 1744639204

I'm honestly stunned that people here are performatively math-illiterate.

Some companies experience liquidity events. Therefor the value of equity in those companies is positive. Some companies go out of business. Therefor the value of equity in those companies is zero.

If N is the ante hoc chance that a company will experience a liquidity event, then:

N * X + (1 - N) * 0 = value of liquidity

X is positive. 0 < N < 1.

Therefor the value is positive.

dcow · 2025-04-14T15:27:39 1744644459

People aren’t saying the chance is literally zero. They are saying it is low enough that they can’t consider it reliable comp for income purposes in their own personal situations. I can’t say my experience has been any different so I don’t blame them. People commenting aren’t math illiterate. I’m kinda amazed you are taking things so literally when it’s so obvious to anybody reading how to interpret the discussion.

aetherson · 2025-04-14T19:24:20 1744658660

They sure are insistent on it being literally zero for people who don't think it's literally zero.

If you like, I'm happy to update my claim to, "startup equity often has non-trivial value, say, >$1000 per year."

dcow · 2025-04-14T23:48:46 1744674526

Add a few zeros and I think we’d be in the right ballpark. You have to make up for the haircut before you start counting positive net value.

scarface_74 · 2025-04-14T16:08:13 1744646893

And then take into account the risk/reward premium and alternatives.

guappa · 2025-04-15T06:18:53 1744697933

I hoped you had some real data, but all you had was a joke.

Ok it's not zero. Is it 0.0000000000000000000000001?

Surely you're aware that obtaining 0.50$ is not going to have a large impact? Even if the sum is 3000$ the impact is extremely limited.

But you had to go and be a r/iamverysmart material because you actually have no more information than me.

Also learn to spell therefore please.

aetherson · 2025-04-15T13:37:11 1744724231

You played a stupid game, you won a stupid prize.

Something is different than nothing. When people repeatedly insist that something and nothing are the same, they get trivial answers.

And learn which side of the digits a dollar sign goes on please.

senderista · 2025-04-14T04:15:40 1744604140

"Statistics" on its own doesn't tell you anything; you have to consider your own risk aversion. Only VCs can afford to be risk-neutral and only consider expected value.