First thing what I could see here is, when peron says Risk.
1.) Project is of short duration, so what next once project is over. Since you have hired, you will have to pay them salary once project is over and you do not have any project in pipeline.
2.) First they will interview your 5 testers and then decide to give project. Since you have hired testers, you will have to pay them salary. But deal is not confirmed yet, so they may give project or they may not.
When he said "Risk Reward", once you take above project and client is happy, you can get more work. Also there are possibilities that, he may get you more clients.
Hope that helps.