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Podcast: Investor Connect Podcast
Episode: Startup Funding Espresso – Base Rate Fallacy
Description: Base Rate Fallacy Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. The base rate fallacy is a cognitive bias defined by Wikipedia as the tendency to ignore base rate information (generic, general information) and focus on specific information (information only pertaining to a certain case). One-off sales to specific companies while helpful do not define the startup's growth forecast. Investors should look at the core systems of a startup to understand their acquisition, conversion, and revenue. Consulting work and other non-recurring revenue models make it difficult to predict r...