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If you read closely, you'll see that I know that this makes sense to YC (and others in similar position). But it's not viable as a generic investment strategy.

YC have a proven track record and I'm sure if they allow no-idea founders in, it'll prove to be a big success too. But again, YC is the outlier here.

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To turn this around, how exactly do you measure the risk of investing in a would-be entrepreneur?

If two otherwise equal entrepreneurs ask for money, and one has a product idea while the other does not, what is the difference in probability of business success between the two, assuming they both go on to secure the same amount of funding? If they are different, what is your reasoning for assigning different probabilities?

As an investor, you can judge the current market size, the potential, as well where that fits into current trends when the entrepreneur's idea is present. Those are just some of the factors that are generally taken into account when making any investment.

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