The problem with all those various risks is that it is difficult to know how likely or unlikely they are and how much harm each one would cause if it occurred.
These are two different and independend factors: The probability of something bad to occur and the maximum damage it would cause. Technically a risk is defined as the product of both. As a consequence you must try to avoid/mitigate risks with a high probability and a high damage (e.g. going to the stratosphere or to the moon without protection), while you might accept a low probability, high damage risk (e.g. traveling by plane) or a high probability, low damage risk.
I think an example of the latter is when the POET lab guys worked their path to the 100 nm target. There was quite some probability that they couldn't do it as planned. And indeed, this risk really occured! However, it did not mean the end of all POET dreams with 100% loss, but the damage was rather low, being a delay of some weeks while the team worked on a viable solution. Actually the net damage was even smaller, because they invented a new patentable process.
Investors must try to valuate risks (and chances) as exhaustive as possible, i.e. do their DD. Legal speak and risk list help insofar as they mention each risk and you probably won't overlook one.
Actually doing the DD is a hard job, and I am very grateful for this forum and the great people around here, because together we are considering each and every factor, pondering pros and cons, and all in all we are establishing The Big Picture – much better than each individual of us could do. Personally, I'd like to extend my gratitude especially to fairchij and oogee. Without them, I wouldn't have really understood my POET investment and it would never have occupied so much room in my portfolio. Thank you, guys!
(Yes, I know, sometimes it doesn't go smoothly here, but overall this forum is really, really valuable!)
