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I’d definitely take 100% * $100k = $100k over 0.01% * $10M = $1000, especially since money has diminishing returns to happiness. Now perhaps you think your odds
by gbear605 7y ago
I’d definitely take 100% * $100k = $100k over 0.01% * $10M = $1000, especially since money has diminishing returns to happiness. Now perhaps you think your odds are better than 1/10000 or that you’d make 10 billion instead of 10 million, but assuming the given odds and valuation, there’s no way I’m going with the risky offer.
- SpicyLemonZest 7y agoTo first order, successful startup founders are the people who don't do these calculations. Any early stage software business has countless plausible reasons why it's likely to fail; if you're thinking about risk-benefit analysis beyond the basic sanity check of "will my life be ruined if this doesn't work", you're sapping energy you need to actually make it successful. (I'm not saying this to look down on you! I'm absolutely the kind of person who does these calculations, and thus shouldn't found a startup, even if it sometimes sounds cool to me.)
- vikramkr 7y agoI think founders do those same calculations, Since you can't be successful if you can't accurately judge risk, but I think the utility function is different in how founders value non-monetary rewards and the mission of the company etc, and I think founders might also see themselves as in positions to influence those payoff numbers to increase the probability of success or the venture or the payoff as t the end.