>Basically, is there any valuation method you have that would make you indifferent to a bet on the portfolio's valuation going up or down?
No, there isn't. Angel investing is an inherently speculative game. What I would say is this: a YC investor could reasonably claim to have seen a return on any shares he sold, or any shares he holds of a company that has gone public. That's it. Beyond that, all investments are good only in theory. Were I to buy a house, I would decide what was affordable based on the former, not the latter. The same is true for my contributions to my children's college fund or my retirement fund. In short, all of the things that actually matter in life would be based off of what I had sold and what shares I held of public companies. To make any long term financial decisions based on the projected worth of companies that had, at best, gone through a successful series A or B would be foolish. They're nice numbers to think about, but they don't mean a damned thing until they're putting food in my kids' mouths.
Let's illustrate my point like this: Suppose you are given the chance to pay 1MM for some good that has a 20% chance of being worth 1BB in 5 years. If you can spare the million, then this is a fantastic investment by any measure. Having bought into this investment, however, how would you describe your net worth? Your investment is valued at 1BB. The fact that it will likely never be worth that much doesn't change its value. Heading off the foreseen criticism, let's say that savvy investors would only say it is worth 200MM, the ultimate value times the expectation of realizing it. Still, that 200MM is fairy money. It doesn't exist, and you can't do a damned thing with it until you somehow manage to convince someone to give it to you. To claim that you're "worth" 200MM is silly, as you can't spend a dime of it.
This is the problem I have with pg's numbers: They sound great until you ask what the cash-out is. Saying "I've invested in companies that are worth 4.7BB" is great, but it doesn't say anything useful about how well your money has been used. Remember, prior to investment it was real money that could buy apples and tuitions. Now it's theoretical money that could buy a whole lot of apples, but only under a specific set of favorable circumstances.
A final reduction: There is a claimed ROI of ~13:1. Being generous, I would ask this: how many people who invested 1MM into YC have pulled 5MM out?