[toohotatopic]

True. But all those failed adventures bring down your average return on investment.

There must be a class of businesses that have half the risk and half the profits compared to the businesses that VCs accept. From an investment point of view, the ROI would be the same, but VCs wouldn't invest. How do those people get money to fund their businesses?

[woah]

Giving new businesses with no assets and no cash flow unsecured capital is inherently risky. It only makes sense if there’s a potential for outsize returns.

The only thing that would make an investment like this less risky is collateral, not worse potential returns.