Startup Risk Assessment

Startup Risk Assessment-The Need

If you are risk averse then startup is not for you. However if you decide to be a startup you can postpone risk assessment till you establish product-market fit. You have to take a call on which are the risks that should be minmised. It is sometimes a judgement call.

The various blogs on this subject will guide you and also help you to develop your own frame work.

"Startups of all shapes and sizes are extremely vulnerable to many types of risks- from the insurable to the not-so insurable. 

The first step in a proper risk assessment is thoroughly understanding all possible damages you might face in starting your dream. Secondly, you’ll have to identify the risks with the highest probability of occurring and map out a plan"Source

Startup Risk Assessment Series # 004

10 Perspective Checks on Your Startup Aspirations- Martin Zwilling

Every entrepreneur needs to be honest about their strengths and weaknesses, and realistic about their reasons for choosing the startup route. For any entrepreneur, even the best business opportunities, if entered for the wrong reasons, will likely fail. Some of these reasons seem obvious, so forgive me for restating, but I still hear them too often.

Statistics show that at least 50% of new startups fail within five years, and many of the survivors eventually fail.

Startup Risk Assessment Series # 003

Managing Startup Risks – An Entrepreneur’s Guide

At its core, running any business is a task in risk management. The risks arise from uncertainty about various aspects of the business – what will the customer preferences in the future be, will the firm’s technology succeed, how will be overall economy perform, what will the firm’s competitors do in the future, etc.

It is important for the entrepreneur to be aware of the risk that she confronts in her business and prioritize them appropriately since some level of risk is inherent in every business.

The typical entrepreneurial personality is less averse to risk and often ignores them. In the early stages, this is often a good thing because an over-focus on the risks can paralyze the entrepreneur to inaction. But as the business matures, the entrepreneur should adapt and be cognizant of the risks that the business confronts.

Rather than attempting to bring these risks to zero, entrepreneurs should make a judgement call about which risks need to be mitigated (and to what extent) for their specific context.

This article provides a general framework for assessing and managing the risks that confront most startups.

Startup Risk Assessment Series # 002

How to De-Risk a Startup- Leo Polovets at Susa Ventures

The best way to make progress on a company (and to get higher valuations from investors) is to address the biggest risks as quickly and thoroughly as possible. But how do you actually mitigate different types of risk? How do you convince yourself that you have product/market fit? How do you persuade investors and employees that you can build a lasting company? How do you demonstrate to early adopters that you're good at building products?

This post contains a (non-exhaustive) list of common startup-related risks, the spectra along which those risks might be classified, and some tips and heuristics for mitigation. The further you move from "high risk" to "low risk" along each spectrum, the stronger your valuation, perceived progress, and likelihood of success will become.

The entries on each risk spectrum are rated from 1 (high risk) to 5 (low risk). Your goal is to move away from the 1's and toward the 5's.

Ultimately, addressing risks is not something you should do for investors, it's something you should do for yourself.

If you're thinking of dedicating years or even decades of your life to something, it's worth understanding where your biggest challenges will be and how your can incrementally address those challenges.

Startup Risk Assessment Series # 001

Startup Risk Assessment Series # 001

14 Startup Risks Entrepreneurs Should Consider When Launching their Startup- Tony Lettich

Starting a scalable company is a daunting task. This will challenge even the most experienced management team. The team’s success requires a complete understanding of the issues and risks it faces in its quest to succeed.