Knock, knock. Who’s there? Opportunity. Do I know you?
Companies do not maximize profits consistently. They lose deals they should win, waste money on programs that won’t deliver the expected returns, and price their products incorrectly. Similarly, Venture Capitalists (VCs) do not maximize profits with any consistency either. They bypass investments they should make, invest in companies that won’t deliver the projected returns, and value companies incorrectly.
Why are minimized profits common? Certainly, it’s not what businesses desire. It’s the result of behavior. Businesses make investment decisions based on their instincts and habit, rather than on analytical reasoning. Opportunity loss prevails.