Firms that grow quickly may seem less risky/more likely to succeed therefore fast growth may help an entrepreneur extract better ownership terms from potential investors.

Question

Quizplus · Accepted Answer

Fast-growing firms often appear more promising and less risky to investors, who may be willing to accept less favorable ownership terms for themselves in exchange for a stake in a rapidly expanding business, anticipating higher returns.

Firms That Grow Quickly May Seem Less Risky/more Likely to Succeed