Risk Management From Investors’ & Managements’ Perspective
In today’s business world, totally avoiding risk is impossible. There is always a degree of uncertainty that executives can’t avoid. However, risk can be identified and managed properly through a strategy of risk management. “Investors understand that there will always be risk associated with their investment and therefore they require a proper risk management strategy as part of any business proposal” commented Ingo Mueller, CEO of Capital Fusion Group, a Vancouver financial advisory company. Ingo Mueller has worked with investors from various countries and has raised more than $200 million in financing.
There are three major risks that concern most investors. The risks are credit risk, liquidity risk, and operational risk. New or growing businesses also face the same challenges of managing risk. This is why it is important for start-ups to clearly define their risk management strategy. Proper risk management enables a company to meet investor expectations leading to an increasing likelihood of attracting the necessary financing for the company.
“When working with companies, I always work with experts to determine the core business elements and associated risks. Identifying these elements and working with management to develop risk mitigation strategies inevitably leads to more sound business practices” said Ingo. “With a risk mitigation plan in place management can focus more clearly on the elements of the business that will lead to business execution success”. Therefore for management and investors, appropriate risk mitigation strategies are a proactive process to help the company survive and thrive.
