I attended a business seminar where a facilitator a renowned professor, and Entrepreneur shared a story on how he missed out on investing in a small fintech start two years ago which as at today is worth $500 million. He said the team had approached him to make an a investment in the start but because he did not understand how the were going to make money since he didn't invest the $100k he wanted to write them. Today, he would have been $7.5million richer had he invested.
They say do not invest in what you do not understand which was largely the principle the speaker adhered to but what if despite not immediately understanding the business model and its profit making model yet your business instinct pushing you to invest. What should you do? Listen to the former or follow your instincts?
The thing is this quote is heavily butchered and tattered at least in my opinion. For me it's "Do not invest on what you do not know, but always leave some for risk tolerance". Sometimes and I mean this cause this has happened one too many times in the past, the most in-the-dark and unknown ventures are the ones that bring you the most profits. And if no one ever took risk in this industry there'd be no successful people at all. So while it's always smart to do your research and understand the ins-and-outs of the business venture you're being told of, it's sometimes much more essential to actually just take the bait and wish for the best. Fortune favors the brave after all, so why always chicken out and cover it with "I didn't know how they'd make money".
I'm not saying you should stop thinking at all when making business and financial decisions. Just saying that sometimes, you gotta leave something to chance.