Investing in public companies or public debt is reasonably apparent. You talk to your broker, and off you go. The investment is highly liquid: a phone call gets you in or out.

Private investing is different. There is no certainty that the investment will ever become liquid again: the only ways to liquefy an investment in a private company are to sell the investment itself to a third party, to sell the entire company, or to take the company public in an IPO. It’s a lot easier to sell an entire company; that is the usual way liquidity events occur. The public markets are fickle — particularly in the wake of the disastrous Facebook IPO — and most private investors are not very interested in buying only a piece of a company as it is very difficult to get that next liquidity event, especially when the investment is not a control position.

Because of this, the holding period for a private investment is usually measured in years, not days, weeks, or even months. A lot can happen in a “years” time frame, particularly as we will see below.

The basis of any investment is ultimately a “go/no go” decision. This investment decision is an actual “yes or no” decision, based on the assessment of risks that are to be taken by the investor. This is particularly important in a private investing decision when a liquidity event takes place in an uncertain time frame.

Which is where I think so many on the left are bereft of common sense.

The refrain from many liberals I know these days: “Where are the jobs? Why aren’t businesses investing?” There are no mandates that an investor is required to make investments that he or she might not otherwise make. If I don’t like the risk I perceive, I am not going to make the investment and will choose to wait for a better time.

There are all sorts of risks that are taken when one considers any investment decision. Some that all investors engage in: environmental risk (not what it sounds like — see below), industry risk, enterprise risk, management risk, time horizon risk, and liquidity risk. I’m only going to discuss environmental risk, as it impacts decision-making; the rest of these should be self-evident.