Example: if I'm an entrepreneur and I see an opportunity, and I have a friend with the resources to support me and who also thinks this is a good idea, then I'm

Example: if I'm an entrepreneur and I see an opportunity, and I have a friend with the resources to support me and who also thinks this is a good idea, then I'm not going to go out and raise funding from random strangers. You'd be surprised how many deals like that are out there. Many entrepreneurs do business with a few solid partners during their lifetime. Aside from that, there are other reasons: 1. You don't want to invest everything in the public markets, i.e. acquiring an interesting existing business and growing from there could be a good idea. 2. Some of these businesses might be less prone to losses during a recession or stock market correction, so they might serve as a buffer for cashflow and income. 3. These deals might have higher upside, because of information asymmetry or something that isn't blatantly obvious to other people. Alternatively, you might have access to different channels that could easily grow the business.