The Concept of Risk & Return

If you choose to start your own company or take a risk within a larger company to do something innovative and new, chances are you already have an innate understanding of risk and return.

However, if you need someone to invest actual dollars in your idea, it helps to have an understanding of risk and return from an investor’s perspective. Here are a few articles that I think offer insight and perspective into the concepts.

Understanding Risk and Return: The Roller Coaster Ride of Investing

Danger and Opportunity; Risk and Return

As you read, consider the following:

  • Have you ever invested in the public markets (bought stocks, bonds or mutual funds)? If so, what was your experience?
  • Is the age-old maxim “buy low; sell high” in conflict with the concept of risk and return? Why or why not?
  • What are some of the types of risks a start-up company might face?
  • Do investors prefer to give start ups all the money at once or in stages? Why?
  • If a start-up company reaches a milestone does it’s value increase? Why?
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