I like this. My favourite rubric in this area is "there are no Black Swans only Xmas Turkeys." I think that is similar to your view - that all the evidence we need to deduce an out come is available in front of us if we have the right model (human farmers are charitable to turkeys is a bad model, 23rd of December will not result in another free meal is a better model)
I am surprised that investing, especially with Mr Altmans connections and experience, is still a 1/8 crap shoot and that's with no IPOs / exits. It indicates that the model we hold for what the world will look like in 5,10,20 years is far far from complete.
I think that 1/8 sounds amazing actually, let's look at some totally theoretical and extremely simple numbers (basically all we can work with in this case without doing some significant legwork to try and sniff out the actual investments).
To keep it simple let's invest $100 in each of those 40 companies. He defines success as companies that have grown at least 100x over. We know 5 companies have hit that mark and know basically nothing about the other 35 that we'll just consider failures (even though they might only be 10x or 50x[a success in other areas for sure]).
Failed$ = ($100x)35
x is the multiplier on that money across all 35 companies. Perhaps he lost it all and it's 0, maybe it's slightly above 1, who knows. Regardless, in this totally mad eup case the total potential loss (ignoring potential to be invested elsewhere) is $3,500 or 87.5% of initial outlay.
The remainder using the simple information and interpretation available to us looks like this:
Success$ = ($100* 100) * 5 = $50,000
That is 12.5x the initial outlay of $4,000. Making 12.5x your outlay in presumably only a handful of years is massive. Obviously growth doesn't mean exactly 100X, but I just wanted to show that a handful of hits (and I think 5/40 is bigger than a handful) can easily pay for everything else and more.
Reread the article, this is only 2-3.5 years of duration. That seems insanely quick for these kinds of results.
I am surprised that investing, especially with Mr Altmans connections and experience, is still a 1/8 crap shoot and that's with no IPOs / exits. It indicates that the model we hold for what the world will look like in 5,10,20 years is far far from complete.