> Returns for our first round of investors are capped at 100x their investment (commensurate with the risks in front of us), and we expect this multiple to be lower for future rounds as we make further progress.
As one example, Sequoia invested in Airbnb at $0.01 per share, and Airbnb's current stock price is $102, almost exactly 10000x return. This happens more often that you think if you're not in the early stage & top VC world.
$0.01 per mean share would mean 6.5M USD valuation (current mkt cap is 65Bn). Accounting for dilution in investment rounds, let's say 4 x 20% dilution, that is around 52% penalty in valuation. Roughly, their entering price would be around 3-4M USD valuation. I am not saying in any way that this is a low return also, I may be wrong on my calculation, please, be free to correct me! ; )
Aren't those equity returns? i.e. when you sell (your shares of) the company to the public... the reason people still value the company is discounted future returns.
So if you want to generate such returns with cash (i.e. profit) it can take quite a bit longer.
They genuinely believe they will build AGI and therefore becoming the world’s most valuable company is a natural consequence.
Whether this is possible/probable is a different story, but I think a capped profit structure makes logical sense for the company that is aiming to create AGI. Would you want this technology instead in the hands of a for profit company?
These are basic language models easy to reproduce where the only barrier to entry is the massive computational capacity required. What is OpenAI doing that Google and others can't reproduce?
