Why Do Founders Avoid a 100x or Nothing Bet?

Luca Ferrari says founders and professional managers avoid a 100x or nothing bet because they hate a median case of ending with nothing, not because they got the odds wrong by 20%. They should. They only have one life and one career.

A venture firm that invests in about 50 companies cares about the portfolio. It may want each company to go 100 miles per hour against the wall. Four or five get through a very narrow door and win 100x, and the others crash. Taken more slowly, they lose the chance of that win and have a better chance of a decent business. For the firm, caution makes the expected outcome worse and barely helps the median. For one company, going that fast improves the expected outcome and makes the median massively worse. It can go from ending with something to ending with nothing.