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I believe we're addressing two different things here. On the one hand I'm talking about the "risk of business failure", on the other hand you're talking about t
by tcgv 13y ago
I believe we're addressing two different things here. On the one hand I'm talking about the "risk of business failure", on the other hand you're talking about the "risk of making less money".
Hence, I agree it makes sense to say that "investment increases the risk of making less money", which is almost the same thing as saying "investment decreases expected return".
- tptacek 13y agoAgain, no, because in practice you won't even entertain those marginal exits: they will have no upside for you. They are foreclosed upon financially. Your return on investment isn't merely reduced in those cases; it is practically eliminated.
- tcgv 13y agoWould you care to elaborate how this relates to the "risk of business failure"? How would taking money from investors increase the risk of a startup not being able to develop a successful business model and become profitable?