Someone once told me that if you rated ppl on a scale of risk tolerance from 1-5, 5 = serial killers, all great investors are at least a 4
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Agreed. This guy (successful public equities investor) claims it is on the list of prerequisites. Prior to a willingness to take high conviction bets, one also has to have an ability to live in the space of tension between many plausible outcomes.
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This is true - VCs must be able to simultaneously hold the possibility of many different outcomes while making decisions and must place high conviction bets, but neither of those is the definition of taking risk. (high conviction != high consequence)
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I’ve never quite understood the “VCs as risk takers” stereotype. We (VCs) have guaranteed revenue streams for 5-10 years and have diversified portfolios. Compare that to an entrepreneur that goes all in on a single idea with no certainty of future revenue. Who’s the risk taker?
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