Most people I talk to about investments immediately agree that diversification is the smart move. They wouldn’t dream of putting all their retirement funds into a single stock or company. The logic is simple—spread the risk to increase your chances of reward and avoid catastrophic losses. This principle is practically gospel when it comes to financial investing.
Yet, when these same people launch a small business, they often do the exact opposite.
They go all-in. Alone.
No partners. No safety net. No collective wisdom.
This contradiction is fascinating, especially considering how common sense it seems to diversify risk in other areas. Entrepreneurs, by nature, are risk-takers. But smart entrepreneurs? They know that sharing risk doesn’t mean losing control—it means increasing their chances of long-term success.
Let’s take a lesson from the oil and gas industry. I’ve spent time around investors in this space, and they operate very differently from the average solo business owner. Say a drilling company finds what it believes is a promising prospect. Before investing millions of dollars, they often reach out to other similar oil and gas firms to share in the opportunity. This isn’t charity—it’s strategy.
These companies aren’t just pooling their money. They’re pooling their knowledge. If one firm sees the potential but none of the others bite, it sends a clear message: it might not be as good a deal as it appears. That collective wisdom acts as a safety filter.
Fractional investments like these allow them to diversify across multiple prospects without increasing total exposure. Each partner brings capital, experience, and scrutiny to the table. It’s like a built-in advisory board with skin in the game.
Imagine what would happen if more entrepreneurs approached small business the same way.
Instead of betting it all on one idea, what if you partnered with others? Shared risk. Shared costs. Shared insights. You could test more ideas, spread your capital thinner, and have multiple minds refining the plan.
There’s a common fear that bringing in partners means giving up control. But in reality, it can often mean gaining leverage. When done right—with aligned goals and clear agreements—shared ventures lead to better decisions and stronger businesses.
This kind of collaborative thinking also helps combat founder bias. When you’re emotionally invested in your idea, it’s easy to overlook red flags. But when others are involved, you gain objectivity. If no one wants to invest in your idea, it might be worth reconsidering before you sink your life savings into it.
Maybe it’s pride. Maybe it’s fear of conflict. Or maybe they just don’t realize that business partnerships can be structured in ways that protect everyone involved and still lead to profitable outcomes.
Whatever the reason, it’s worth thinking about. Just as you wouldn’t put all your money into one stock, maybe it’s time to stop putting all your business hopes into one lonely effort.
Here are some ways to explore shared risk in business:
Form joint ventures with complementary businesses.
Seek fractional investors or co-founders.
Join mastermind groups that pool insight before making major decisions.
Work with advisors who take equity instead of cash compensation.
Use profit-sharing models to align interests with collaborators.
If oil and gas pros can do it, so can we.
Are you diversifying your business risks as smartly as you diversify your investment portfolio?
