There is risk associated with hiring an employee. There is no risk associated with a cash investment, There is investment risk, the risk associated with making

There is risk associated with hiring an employee. There is no risk associated with a cash investment, There is investment risk, the risk associated with making the wrong investment like hiring the wrong employee. The investor with 50k in hand now vs the 100K per year employee willing to work for 50k. The Investor wins. With the 50K the start up can hire the 100k per year employee for 50k. If thing do not work out you can fire them and hire another one. The money is less risky giving it a higher value, plus its all upfront which has already been discussed.