Understanding the Psychology of Investor Decision Making

So where do you start?

By swallowing an uncomfortable truth, the person across from you is driven more by avoiding pain than by chasing upside.

Bold claim.

Most founders show up thinking, I'm about to make this person rich.

And that's where they trip.

Decades of work shows losses hit roughly twice as hard as equal gains.

That asymmetry is baked in to how people judge choices.

BookBrowse.com, HTTPS, www.biographiesindex.cfm, author number 2108, Daniel Kahneman.

Loss aversion.

Reading about it is one thing.

Seeing it on a partner's face is another.

You've seen it up close?

Yeah.

I pitched a pristine hockey stick, all upside.

The investor sagged and zeroed in on tiny edge case risks.

I wasn't speaking to ambition.

I was lighting up fear.

I was selling gain while his brain was whispering, what if I just lose the first dollar?

Exactly.

His reference point wasn't zero.

It was the money he already controlled.

When you only tout the win, you're asking him to leave safety for uncertainty.

Reframe the trade.

Don't only sell the upside.

Name the cost of doing nothing.