Founder's Insights E25: Risk:Reward for Fund Managers

One of the most fundamental principles of investing is the relationship between risk and return. At its core, this concept suggests a positive correlation: the more risk you take, the more return you can potentially make. However, the key word here is can—because returns are never guaranteed. 

Greater risk doesn’t just mean the possibility of greater rewards; it also means a greater dispersion of outcomes, including the potential for losses.

In this video, I discuss how this risk-return dynamic applies not only to evaluating investments but also to fund managers raising capital. I break down why fund managers must think like investors, not just brokers, and how their compensation, reputation, and investor relationships are all on the line with every deal they take on.

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