Note on Using the Venture Quotient to Manage Early-Stage Business Risk: What’s Your VQ?

by: James D. Price

Publication Date: February 1, 2009
Length: 9 pages
Product ID#: 1-428-792

Core Disciplines: Economics, Entrepreneurship & Innovation, Strategy & Management

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Teaching Note

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Building a brand new business from scratch is fraught with peril. Yet ironically, (and contrary to popular belief), the most successful entrepreneurs and venture investors are remarkably risk-averse people who are simply very good at managing and mitigating risk. This note provides a straightforward methodology for understanding and effectively managing the risks inherent in any new business – and applies equally well to stand-alone ventures and new corporate initiatives.

Teaching Objectives

After reading and discussing the material, students should:

  • Identify, quantify, and prioritize the four categories of venture risk.
  • Analyze ways to systematically mitigate various categories of venture risk in a startup.
  • Apply the VQ as a management tool.