Entrepreneurial Mindset

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Proactivity and Calculated Risk

Calculated Risk Taking

Scenario, Video
A picture shows a close up shot of two pennies. One penny is facing heads up. It is placed on the edge of the other penny which is placed tails up.

Source: Tetra Images/via Getty Images.

Acting upon opportunity presents certain risks and uncertainties. However, not taking action is a certain path to not fulfilling one’s potential. Counter to popular stereotypes, exceptional entrepreneurs are not brazen risk takers. Rather, they are very good at taking thoughtful, calculated risks. Watch the video below about entrepreneur Jaspreet Tandon of Downtown Liquors in Washington, DC. On International Women’s Day, Jaspreet decided to give away a thousand of bottles of wine at the cost of a penny to local women. The upfront cost of this effort was significant, and Jaspreet was not sure he would recoup it. However, his risk paid off, and he ended up garnering significant press as well as hundreds of new, loyal customers.

Video 1. Downtown Liquors


Download transcript

Now, test your personal approach to risk with the following scenario.


You’ve been asked by one of your closest friends to join her start-up. She has won several student competitions and has a year’s worth of funding and sees promise with a follow-up round from 2–3 angel investors once her products start to sell. She has filed for a patent application with her prototype and has secured modest manufacturing and office space from her aunt. There is significant momentum and publicity around her start-up, and potential customers love her product idea. Your friend has offered to pay you USD 50,000, offer 10% earn-in equity that accrues at 3%, 6 months, 6% in 1-year, and the full 10% at the end of year 2. The company will cover your basic health insurance. You are both graduating this semester, and you heard from the company where you last interned that they wish to hire you full-time for USD 75,000 a year with full benefits. The only condition with the company job is that you will be required to move away 1,600 km (1,000 mi) from home.

What course of action would you pursue?

Consult the Experts

Do you want to know more about the differences between risk, uncertainty, and ambiguity? Risk can be quantified like the probability of heads versus tails with a coin toss, uncertainty cannot be quantified, and ambiguity allows for several interpretations and potential courses of action in an uncertain environment. The following readings are helpful: