this is a really cool idea.. its also great intel on the yc batch companies haha!
how do you track returns? how much money the companies raise? what the companies are valued at? isn't this dangerous because all angel investors including ron conway and pg say it's not about how much money you raise and that is a poor indicator of how successful your start-up is going to be...
obviously a fantasy league where you have to wait 10 years to see who actually wins and becomes a 10 billion company etc. isn't that much fun, but i can't figure out what short-term metrics that would work across different start-ups with different growth plans (i.e. some start-ups will focus on page views, others on sign-ups, others on transactions etc.)
The idea is that after the "seed" stage we're in now, the shares will float, so you can put in bids and asks to buy and sell. But, whenever real-world liquidity news comes in (raise money, acquisition, ipo), people will be able to buy/sell at that price for a week before it goes back to floating!
ahhh so it's less fantasy football more stock exchange where value is determined collectively by the market, as opposed to externally e.g. with fantasy scores every week. i understand now.
this could indirectly be a good way to reveal peoples biases (including angels) about what companies will be successful... it's especially interesting as it removes from the equation the one component that vcs/investors say is most important which is their feeling about how good the team is... if the stock exchange can accurately predict which companies are going to be successful without that information that has interesting implications for vcs approach in picking companies.
it would be interesting to have two separate fantasy leagues. one just like this one . but another where investors get to see 2 minute videos with the founders just talking about themselves/their company... it would be itneresting to see if the companies they invest in are any different because of these videos... and furthermore if 2 minutes of video lead to significanlty better predictions about which companies will be successful..
incl. obvious implications for ycombinators model with 10 minute interviews etc.
Fantasy stock markets were fun back in school, this could be too. Edit with my only feedback: put a big, fat FAQ button somewhere. It took a little while to notice the tiny "learn more" text.
This looks really interesting. I love playing football manager, and I always thought there is a niche for business oriented simulation games. I wonder though, are there copyright issues with using these company names, or do they all used with permission?
People take more risk on paper -- it's like your high school stock market contest where the winner put everything on a penny stock and got lucky. Will there be some bias like this?
No. It's not. It's really unrelated and a good idea. Wall Street S&P500 still beats Venture Capital returns on average and it has PLENTY of fantasy investing.
If most people on a fantasy site seem to be making money hand over fist then it's time to watch out. Angel investing is harder than most people think.
Haha this is a great idea. I know angel investing doesn't necessarily work like traditional stock investing but I'm noticing all the companies on the exchange start at the same price. Is this accurate or should they be valued slightly differently from the onset?
Also it would be great to see some more information for each company added to the listings, even some basic details pulled from Crunchbase would be nifty.
Ah, so actually during the seed it's an auction. When you place your "commitment" to the round, you set a max valuation you'll participate at. Then, when the seed round is over, the price paid is actually the highest "clearing" price, and the company sells 500K to 2M shares.
Great idea, I'm signing up tonight! I already play fantasy stock market, I think other Investopedia users would love to get a taste of Angel Investing as well.
Personally for me I would've liked to see the start-ups that did not get through interviews for YC etc.
Nothing against having the ones who made it through YC etc. too, but these have already been vetted by people we admire/trust/know-of.
Having just these makes it seem like picking out of the Dow/S&P/Your advisers suggestions as opposed to ALL public companies (penny stock, pink slip and the rest included).
This is amazing. The first time I used excel was to play the Stock Market Game (http://www.stockmarketgame.org/) in elementary school. The public markets were as bubbly then as private markets are today... I wonder if in 15 years it will be as common to invest privately as it has become to invest publicly.
I also did the StockMarketGame in high school (class of 2000). The market was ahhhh-booming. Howerver, I took advantage of the fact that the prices were delayed by 15 minutes (no real-time quotes), by the end of the semester, I think I had over a billion dollars in my account.
Dumb question, but I'm a scientist and not in this field: how does this work? If I want to commit a certain amount for a certain valuation, how will my "portfolio" grow? By actual valuation placed down the line? Is there a quick guide? I couldn't find one.
yah this idea will never be smart for one very good reason. The probability of the bottom 99% of VC ever rising up to challenge john doeer, chris sacca and the rest is near zero.
In sports you have the probability of a lower tier athlete going off on any given day and that probability is high enough to create uncertainty, For this model to actually work you need a VC like "HighlineVC" to hit a unicorn. Fat chance of that every happening, they are orders of magnitude more stupid then sequioa.
noob angel here - what is the maximum valuation box for? I figured if you are investor you want that number as low as possible and the company wants that number to be max big. I tried putting in .000001M but says "must be at least 5M". Is there any reason you would make it bigger than 5M?
I would argue it's not a proper market place, fantasy or not, without such ability. (meaning, whatever values or data that comes from this is of near zero utility without the ability to short)
I'd guess the comment was less about 'what people think is proper,' and more about the fact that there are typically no mechanisms by which to short very early stage private companies.
last time i checked, every single fantasy football site also didn't allow you to borrow money from money sharks to try to bet against on a bad line up.
That is true, people are generally optimistic about startups but i really do wonder if i have a lack of vision or something, because when i look at this list at exchangel, i see a pile of useless stuff with only 1 or 2 diamonds and 3 or so useful ideas...
At a glance, 34 of the 96 startups listed have "XYZ for ..." in their blurb (35%). Of these, there are 2 Ubers, 2 Slacks, 2 AWS's, and 1 each of Stripe, SolarCity, Nest, Siri, Palantir, Clever, AngelList and AirBnB...
As a co-founder of Sand Hill Exchange (http://sandhill.exchange/), we're excited to see many people growing the burgeoning Fantasy VC ecosystem. I like Exchangel's focus on seed stage startups, as I feel this is where the most interesting entrepreneurial energy resides.
Obviously, there are many key differences -- Sand Hill Exchange in particular offers the ability short sell, profit, etc. We'll be spinning up a hacker news league on http://sandhill.exchange/ soon so you can all skip our waitlist!
--
Gerrit Hall
Co-Founder, Sand Hill Exchange
gerrit AT sandhill DOT exchange
93 comments
[ 4.1 ms ] story [ 156 ms ] threadGotta start somewhere... it's like the 2015 draft class for now!
how do you track returns? how much money the companies raise? what the companies are valued at? isn't this dangerous because all angel investors including ron conway and pg say it's not about how much money you raise and that is a poor indicator of how successful your start-up is going to be...
obviously a fantasy league where you have to wait 10 years to see who actually wins and becomes a 10 billion company etc. isn't that much fun, but i can't figure out what short-term metrics that would work across different start-ups with different growth plans (i.e. some start-ups will focus on page views, others on sign-ups, others on transactions etc.)
this could indirectly be a good way to reveal peoples biases (including angels) about what companies will be successful... it's especially interesting as it removes from the equation the one component that vcs/investors say is most important which is their feeling about how good the team is... if the stock exchange can accurately predict which companies are going to be successful without that information that has interesting implications for vcs approach in picking companies.
incl. obvious implications for ycombinators model with 10 minute interviews etc.
My link if anyone wants (if you use, we both get Ex$50k apparently): http://exchangel.co/r/38
My chrome extensions are probably fudging it.
If most people on a fantasy site seem to be making money hand over fist then it's time to watch out. Angel investing is harder than most people think.
Also it would be great to see some more information for each company added to the listings, even some basic details pulled from Crunchbase would be nifty.
Not that those are necessarily exclusive - he could be nodding his head, thinking "I get it, this guy is crazy"
http://www.wired.co.uk/news/archive/2013-03/05/naveen-jain-t...
Personally for me I would've liked to see the start-ups that did not get through interviews for YC etc.
Nothing against having the ones who made it through YC etc. too, but these have already been vetted by people we admire/trust/know-of.
Having just these makes it seem like picking out of the Dow/S&P/Your advisers suggestions as opposed to ALL public companies (penny stock, pink slip and the rest included).
In sports you have the probability of a lower tier athlete going off on any given day and that probability is high enough to create uncertainty, For this model to actually work you need a VC like "HighlineVC" to hit a unicorn. Fat chance of that every happening, they are orders of magnitude more stupid then sequioa.
Obviously, there are many key differences -- Sand Hill Exchange in particular offers the ability short sell, profit, etc. We'll be spinning up a hacker news league on http://sandhill.exchange/ soon so you can all skip our waitlist!
-- Gerrit Hall Co-Founder, Sand Hill Exchange gerrit AT sandhill DOT exchange