Risks are potential upsides. Any business that looks perfect, has great net earnings growth, and virtually runs itself will attract a large buyer pool. This will cause the price to go up. On the other hand, if the business has easily identifiable risks, this will cause the price to go down. Both risks and rewards are subjective. An experienced business owner will identify risks and determine if their skill sets will enable them to manage it. Then they will determine if they think they can realize the company's upsides. If the final analysis is positive, then they can buy a great business for a price lower then what their perception of the value really is.