🤔 How Investors Think: Binomial Decision Tree in VC Investing
Founders: Have you thought through how VCs evaluate risk?
You’ve probably read a lot about how to structure and deliver your pitch. But knowing how investors make decisions about whether (and how much) to invest can help you figure out exactly how to present your company in a way that is attractive and mitigates some of the risk VCs are anticipating.
That’s why I wanted to share this binomial decision tree for VC investing. To stay in the game, your company has to demonstrate at least a possibility of being in the 3.2% probability bucket of achieving investors' desired outcomes.
What do you think of this decision tree? Please share your thoughts in the comments.
Source: Alex Lee
