11 Startup Building Risks We Mitigate

Last week I am thinking about the risks of startup building. As you maybe know we are designing our Startup Building process. One of the core elements of this process is that it should mitigate the risks of startup building.

We identified 11 startup building risks. These are the risks every VC evaluates before making an investment:

  1. Market timing risk –  is it the right timing?. We all know use cases of technologies who were invented to early. The market wasn’t ready for it.
  2. Business model risk – Is it a profitable and scalable business model?
  3. Market adoption risk – Is their any competition? Are there any other players? What are the barriers to entry?
  4. Market size risk – Does an Exit scenario provide a good return on our equity investment?
  5. Execution risk – Right Team dynamics? Do the skill sets amplify? Do they share passion for the product?
  6. Technology risk – How hard is it to build the technology needed to do the job?
  7. Capitalization structure risk – can the company add more investments needed to grow, while still ensuring employees and executives they are well compensated?
  8. Platform risk – Is the startup tight to YouTube, Twitter, or Facebook? Don’t put all you eggs in one basket!
  9. Venture management risk – How can we manage the team, so they stay receptive to feedback?
  10. Financial risk – How much money do we need to achieve our goals? Is it feasible given the current environment and company trajectory?
  11. Legal risk – likelihood of lawsuit for patent or copyright infringement? Are there regulatory challenges in this sector?

I am so happy we where able to identify the most common risks. And now our processes mitigate them as much as possible.

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