Final answer:
While entrepreneurs are known to take risks, they often carefully assess and manage risks rather than blindly engaging in extreme risk-taking. Angel investors and venture capitalists aid in this process by closely evaluating the business and its team, which helps minimize risk at the startup stage.
Step-by-step explanation:
Entrepreneurs are often perceived as extreme risk-takers due to the nature of starting a new business venture. However, it is more accurate to say that successful entrepreneurs are strategic risk managers. They must gather substantial information about the business environment, calculate the potential returns, and assess the viability of a startup before deciding to invest their resources. Angel investors and venture capitalists also play a significant role in mitigating risk. These investors often conduct thorough due diligence, getting to know the management team and business plan, hence reducing the information asymmetry that exists in the startup phases of a company.