The calculus doesn’t make sense. Every year investors pour billions of dollars into U.S. startups in the hopes of striking it rich on the next Facebook. But the odds of hitting pay dirt are exceedingly low.
So why take that risk?
It’s a question that captivates Shai Bernstein, a faculty fellow at the Stanford Institute for Economic Policy Research and an associate professor of finance at the university’s Graduate School of Business.
“The fact that ideas, some of them may seem completely implausible, get funded at all is both fascinating and difficult to explain,” he says.