Venture capitalists may expect even higher returns. Because most start-ups fail, investors need very high returns from the survivors to recoup the money they've put into less profitable companies. Investors don't necessarily believe you'll return 40 to 60 percent, but they need to be convinced such high returns are plausible. Your business planning must create a company valuable enough to give that level of return. You can compete on risk.
Investors have a risk tolerance.
Warren Buffett, for example, will only invest in well-established companies with lots of cash and high earnings potential. He's not a big fan of risk. Other investors will toss in huge sums of money on a rumor. You can present your opportunity as either or less risky depending on the investor's risk tolerance. They will generally expect a greater return if they perceive a greater risk.