Investors reviewing deals, you are probably asking the wrong question.
You are asking, how much can I make?
But that is not the question that protects you.
Before you invest, ask this instead.
Where am I sitting in the capital stack?
And what has to happen before I lose money?
You do not need to be a finance expert to ask that.
But the answer tells you everything.
Who gets paid first.
Who takes risk first.
And how much cushion exists before your capital is exposed.
Because returns are only meaningful if the structure protects you on the downside.
The best investors do not start with upside.
They start with risk.
Then decide if the reward is worth it.
Next time you look at a deal, are you leading with upside or protection?