Wait I don't understand, are we assuming that the lottery ticket has a 100% chance of being worth $20 billion? Are we ignoring the fact that there's a sizeable chance that it is worth $0?
The lottery ticket has $20 billion winner written on it. I gave you a range of probabilities that the ticket can actually be cashed. The point is that this probability is clearly not exactly 0.00000... given others have cashed theirs.
But YC assigns it a probability of exactly 0.00000... that you can cash it, given any amount of "seed" money.
However, if you lie and claim the ticket has "$20million winner" written on it (you are misrepresenting the business plan by a factor of 1000 in this case) their ears will perk up and they will assign a non-zero probability (actually an extremely high one), and give you a seed to go ahead and cash it, in exchange for owing them 7% of the winnings.
Given the size of these seeds this behavior doesn't make any sense at all. It is like refusing to take 7% of big winners, only small winners, when most of the lottery payoff is in big winners.
