[dharmon]

To make it a classic arbitrage you would hedge by shorting an "equivalent" asset. For example, if 1/1000th of JP Morgan Chase's assets are those also in your portfolio, then for every 1000 long shares you would short 1 share of JPM.

Since JPM is far from equivalent and most VC capital you don't have access to short, in practice I assume that a) you would assume that any startup receiving financing / investments at unicorn valuations is already a winner, and b) go long a sufficiently large and diverse basket to try to eliminate risk.

Unfortunately (a) is so far from true I'm not sure this would be an effective investment thesis.