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April 17, 2018

Why Entrepreneurs Start Companies / The Sunk Cost Fallacy

Why Entrepreneurs Start Companies / The Sunk Cost Fallacy

Steve Blank takes a look at “Why Entrepreneurs Start Companies Rather Than Join Them” and argues that asymmetric information plays a role when people start out as entrepreneurs instead of joining existing companies.

Steve Schlafman, Venture Partner at Primary Venture Partners, explains that it is perfectly natural to feel attached to your sunk costs. A sunk cost is a cost that has already been incurred and cannot be recovered. The key is to recognize the sunk costs, and then move beyond them.

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