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Explain “Investors pay for the future; entrepreneurs pay for the past.”

Explain “Investors pay for the future; entrepreneurs pay for the past.”

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Answer #1

Investor pays for the future where they look for future ability of the company to grow in the future. A company with high expected growth is likely to get much higher value as compared with a company with no or little growth potential.

Whereas entreprenuers looks at the past to decide whether the company has the potential or not that can be used to put the company back into the growth trajectory. They like to build the company against investors approach to invest in already built company.

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