[portman]

I believe the author made a simple math error.

Economic returns of VC-backed companies follow a power law distribution. This means that the vast majority of the returns for the VC are at the "fat head" of the distribution. The "long tail" does not impact returns, for the VC.

However, for the founder, those returns in the tail can be life-changing. It takes a $5B exit for YC to care. But a $5M exit can be real money for the founder.

So the correct math, from the perspective of the founder, is not "what % are unicorns" but rather "what % sell for more than capital invested" and that number is likely to be closer to 50% than 1%.

[DVassallo]

I’ve been on the acquirer side of $50M exits and from what I’ve seen almost no one makes any money in those situations. It is usually a deal done in desperation and everyone is diluted to the brim.

[portman]

I mean, N=3, but I've made decent money on smaller exits.

The relevant metric is not exit price, it's ratio of exit price to pref stack; i.e. raise $40M and sell for $50M, founder is worse than if they raised $2M and sold for $10M.