This basically a risk return tradeoff. Finance 101 - if u are prepared to take more risk then u have possibly of greater return. Of course if u take on a big risk, you might get ntg back. But the less risk u take on, the less u expect to be rewarded. If u got govt bonds, for eg, there is no risk in those, in most countries. There is no risks so u get a very low rate of return. Risk return tradeoff. If we look at in terms of the investment in a company or the funding option in a company, the very top for most risky way is to take ordinary shares. Ord shares are those voting shares , get the right to vote, get a right to dividend if declared and get to share in any excess access in on liquidation. If the company had debts and company has liquidated you get nothing. It is very rare for a company that has gotten into liquation due to solvency for the shareholders to get anything out of the act. So they take that risks. It is the riskiest type of investment u can make. What we can do, is look at various option. You can have redeemable shares. In other words, i am not really sure if the business will succeed. So i want u to buy my shares and say within 3 or 5 years. rewrite simplify