Let’s say you are a specialist and found an opportunity that could generate from $2M to $5M a year. It is risky, say it has a 20% success rate. Would you leave consulting and start your own thing?

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Technically speaking the expected value is between $400k-1M. That’s more than what most consultants make! I would do it

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No. But I’m also risk averse

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A key question is: How reliable is the 20% estimate? Maybe is 1% and you are overestimating the likelihood of success

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Yes

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Is this a case study question for an interview ?

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Key here is time commitment

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How much time investment required before you know if it's working?

Gotta factor in the chance of going back to consulting afterwards if it fails.

That should make this a no brainer to go for it

Can I sell equity? If it is truly a 20% chance at even $2m a year, in an efficient market you should be able to sell equity to hedge against the risk of failure. If there's a 20% chance of $2m /yr for 10 yrs vs $0 then someone should be willing to buy 50% for at least $500k or so

It’s called seed or angel investment.

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