But it also says there is a small probability that the true number is much higher.
All four appear to have the potential, however small the probability, of achieving outsized 10-20x returns should the deal hit all the downstream milestones.
FORBES: Preclinical Biotech Structured Deals: Reflections on 2013's Solid Start
Typically, in a variation of the Allais experiment, subjects are asked to consider two different lotteries one with a big probability of winning a small prize and another with a smaller probability of winning a big one.
The probability of outperforming the markets is small, and the payout for being right is often lower than the potential shortfall from being wrong.
Unless we assume that entrepreneurs are crazy, the fact that the probability of windfall profits is vanishingly small for the vast majority of ventures only adds to this argument.
FORBES: What Drives The Best Entrepreneurs? Hint: It's Not Money
By contrast, in fat-tailed distributions, the median is extremely small compared to the mean, meaning that the probability of infrequent events is enormous.
The probability of any one of the above-mentioned events (and many more that could be added to a list of potential triggers) may be small in a given year, but the combined probability of at least one or more of these events happening in the next three years is high.
The probability of an even result with a lopsided coin is small.
"The probability of Greece leaving the euro - Grexit - is now very small", he told the BBC.
Retailers also continue to experience a higher average probability of default, based on the Sageworks probability of default model, a predictive statistical model for the credit analysis of small or privately held companies.
应用推荐