It's not purely chance how well a company will do.
And if you just consider the statistics I wouldn't have thought that the fraction of companies failing is that extreme for it to be negative in the expectation value (especially if you group it into different categories, etc.). Economically it sounds counter-intuitive to me as well.
Comments
Isn't the "Expected monetary payoff" of starting a company negative?
It's not purely chance how well a company will do.
And if you just consider the statistics I wouldn't have thought that the fraction of companies failing is that extreme for it to be negative in the expectation value (especially if you group it into different categories, etc.). Economically it sounds counter-intuitive to me as well.