Grub with the partners of Sequoia Capital

(and you are not mistaken, unless I am mistaken)

With 8 winners, they should be clearing at the 9th highest bid.

Of course you don't have to do it this way, but it's the least game-able outcome.

It's clear they had the second-price/Vickrey style in mind, and they came awfully close to getting it right.

Note that in FPSB you also don't have an incentive to report your true value, but it is revenue maximizing and efficient in expectation assuming risk-neutral bidders [1].

The basic gist of the proof is that everyone has an incentive to shade their bids down in proportion to the probability that their bid sets the price. The amount you shade is monotone in your valuation, so you end up with the same relative ordering of bids.

And the punchline is that you get the same winner and the same expected revenue for the Vickrey vs. FPSB.

[1] http://en.wikipedia.org/wiki/Revenue_equivalence_theorem#Rev...

    $(".only_numbers").keydown(function(e) {
        var key = e.charCode || e.keyCode || 0;
        // allow backspace, tab, delete, arrows, numbers and keypad numbers ONLY
        return (
           key == 8 || 
           key == 9 ||
           key == 46 ||
           (key >= 37 && key <= 40) ||
           (key >= 48 && key <= 57) ||
           (key >= 96 && key <= 105));
    });

And you can't press cmd+a to select all, or ctrl+a to go to the beginning of the line, and argh all manner of awful.

That being said, this has been a staple of charity 'silent auctions' for a while. I and 79 of my closest friends had lunch with Dean Martin in Las Vegas one year as part of a MD telethon related charity event. That was like 1977 I think.

From the point of view of encouraging entreprenurial growth it is probably counter productive, you've got a lunch, with some guys who understand running a small business, but are you really going to be able to develop enough shared context to make any improvement over your current plan? I think it is unlikely and a trip to the library to read some of the things they have published (or accounts of how they did what they did) would give you a stronger benefit as the thoughts on paper are concise and on target, and not competing with 4 other people for attention.

Now if you're a founder doing a funding round and you think your pitch is going to take more than 30 seconds and you've been trying for weeks to get them to just take the damn meeting so you could pitch them, well this could be one way to work that.

Just last Friday, two entrepreneurs had lunch with Drew Houston and Trip Adler. Because they paid the most? No. Because they got rated highly by their peers.