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Founders who are good at building hype (e.g. Elon Musk) effectively have high P/E ratios that afford them cheap cost of capital, lower CAC, and better recruiting pipelines.

h/t @kevinakwok
@kevinakwok P/E ratio is effectively "what’s substantive value of X and what is the multiple above that we are evaluating X at?"

High P/E ratio enable you to get cheap cost of capital, or, in non financial markets, social capital or knowledge
This is good to the extent you can generate strong ROIC on that form of capital that it allows you to get cheap.

You usually can if the cheap cost of capital unlocks a constrained resource.

If it doesn’t generate high ROIC, then could be awkward when it converges to reality.
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