On Yuri Milner making a blanket investment (loan) offer to every Y Combinator startup:  very interesting and good headline fodder, but in many ways, not surprising.

The return distributions for Internet-flavored technology startups have gotten very, very skewed.  For example, instead of a bunch of big exits ($500m or more) per year, we’re going to have one gigantic $50b Facebook exit.  The expected value for investors and entrepreneurs may not have changed much, but the chances of any single project generating a return is much lower.  It’s becoming more like a lottery.

If you wanted to play in this market, what would you do?  Buying a little bit of a lot of lottery tickets is not a bad idea, especially if:

• You have a huge fund.
• You believe that Y Combinator is a reasonable filtering function for startup quality.
• You get visibility and an option (explicit or implicit) to invest more later in the winners.