1) The risk profile of small investors and large investors is different. Large investors, due to the fact that the utility curve of money is not linear, are mor

1) The risk profile of small investors and large investors is different. Large investors, due to the fact that the utility curve of money is not linear, are more prone to risky investments with a part of their portfolio. 2) High risk investments are needed to get out of local maxima. One easy example is electric cars. They're obviously inefficient today, because oil based transportation is a local maximum for the utility of cars. In twenty years? Probably gasoline powered automobiles will be a minority of sales. Another easy example: private space exploration (spaceX, Virgin Galactic and such). Hardly profitable today, probably very profitable in a few decades.