But, the probability estimates are usually bullshit. How do you know you have a 10 percent chance versus a 1 percent chance of being acquired? You don't, and you're kidding yourself if you think anything with that level of uncertainty is something you have a handle on. It's best to simply acknowledge that the billion dollar exit is far less probable than the million, and do the logic from there.
If founders and VCs could math, and if the probability estimates had real meaning, you would have to integrate over the probability and profit/loss curves to estimate future value.
Using single numbers like this is just story telling.
However - if you can spare the time, you can also play Corp Dev at their own game and see if you can get a firm offer.
As long as you're careful not to share IP or intelligence, a firm offer will tell you that your startup is worth at least 2-4X as much, could easily be worth 10X as much, and may be worth 100X as much (but probably isn't.)
That's useful information, even if you have no intention of selling.
I see no problem with stringing Corp Dev types along on that basis.
