The Lady or the Tiger Here's an exercise in risk appetite/expected value. You are the CEO of a Venture company with limited cash and very uncertain prospects for access to any more. You have two choices:
1. Put up $150,000 of your cold hard cash today and roll the dice as to whether that money will be lost
2. Put up no money, take no risk and defer that decision for a year. The cost for doing this is $50,000
What is the sensible thing to do?
Of course it depends on both your level of confidence and your appetite for risk. A conservative investor would probably say "Are you kidding? You're going to give me a year to see whether we've hit the Mother Lode whereby I make a million or so and all it costs is fifty grand? With zero cost for failure. I'm all over it"
But Greg Hahn did not do that. He put up the $150,000. What does that tell you?