Alpha, Beta, Sharpe: An Accessible Overview of Finance Jargon

First, a bit of background. Alpha, Beta, Sharpe, and R2 are metrics that were proposed over 50 years ago by academics (like Eugene Fama and William Sharpe) that sought to understand financial markets. It was part of a model known as CAPM (Capital Asset Pricing Model) which is one of the only unified frameworks unique …

The Success of Startups & Power Laws

We know from historical records that startups have a high failure rate (i.e. many startups do not produce any profit at all) and that the few that do tend to win big. It’s no surprise that venture capitalists choose to model this relationship by a power law—meaning "a relative change in one quantity results in a proportional …