I am certainly sure that If I was given 10% of cuil 33M I would have end up with something 10 times more useful and profitable
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But would you be targeting an sector as attractive to the investors as Google? The investors weren't worrying about the making "just anything" useful or profitable. They wanted Google profits and Google uses.
do you wonder whether I claim to be able to set unrealistic targets and reach them, if so the answer is no.
Besides, sow do you know what where the investors willing? AFAIK, investors are normally willing to invest one hundred now and get one thousand several years later. In other words, investing 33M to get 330M 5 or 10 years later.
AFAIK, investors are normally willing to invest one hundred now and get one thousand several years later.
Not quite. VC plans on 9 out of 10 deals not working out. So that remaining 1 in 10 has to make enough to pay for the rest. That means that a 10-fold return just breaks even. But it gets worse. For an investment with a 10 year horizon they need to beat alternate investments. If you peg those at 10%/year (compounding annually), then you now need a 25-fold potential return on investment for the fund to have a chance to meet its goals.
... Why was this modded down?
Is the reasoning wrong, or is there some troll going on that I don't know about? It seems quite realistic to me.
I wonder the same, perhaps, this is the new HN.
You're just seeing the actual outcome.
The investors paid for the full probabilistic model, where in 10% of the cases Cuil would have succeeded in beating Google and would have made tens of billions of dollars. That alone is worth 10% * tens of billions = billions. 33M for that doesn't seem much in that perspective.
Your statement about "I am certainly sure" and "10 times more" ignores the probability distribution of your potential success, and how big is your success in each one of the cases.
As my accountant likes to repeat that cliché over and over, "Even-though figures do not lie, lairs can figure" - All I was saying is dead simple, and this is actually the values I was raised by, one should treat some one else's money 70 times more carefully then one's own.
I am sure not everyone would agree to subscribe to this rule, but I do.
By all means it should not take you $33M to recognize that you are in the wrong direction, the first 2-3 should do the job, unless you choose not to see what is happening in front of your eyes.
This is to be said to the founders and investors altogether.
Cuil was a joke, an expensive joke, period.