Who risks more: capital or entrepreneurs? Entrepreneurs may not contribute upfront capital but they are contributing market value of their labor to the enterpri

Who risks more: capital or entrepreneurs? Entrepreneurs may not contribute upfront capital but they are contributing market value of their labor to the enterprise which may be substantial over the first 6-24 months as a venture tries to get off the ground. Entrepreneurs are also expected to go down with the ship. They can't easily pick up and leave if they're burned out or if an attractive opportunity arises. Furthermore, the odds of a return are low without an opportunity for diversification. Capital can make a bet and if the deal is structured right they can dollar cost average into their position to avoid dilution, whereas the entrepreneur will typically face significant dilution. For some unicorns like Facebook or Google there was very little downside risk after the first 6-12 months and they clearly made out better than their investors.