1. What is your risk tolerance?

2. Objectives Examine risk tolerance in the context of entrepreneurial behaviors Explore the impact of risk tolerance on success as an entrepreneur Assess your personal risk tolerance

3. Macroeconomic Change Entrepreneurial Motivation Entrepreneurial Behavior Confidence Risk tolerance Interpersonal skills Social capital Industry Condition Industry Status Opportunity Identification Value Curve Competition The Opportunity Analysis Canvas TM Entrepreneurial Mindset

4. Defining risk tolerance “possibility of loss” Loss of money Loss of time Loss of opportunity

8. Do entrepreneurs show higher natural tendencies to take risks? No, not consistently Growing consensus among researchers shows that entrepreneurs and non- entrepreneurs do not show differences in natural tendencies to take risks (Busenitz, 1999).

9. We all see risks differently Perceptions of risk differ between –entrepreneurs and –non-entrepreneurs Risk is in the eye of the beholder –Risk is conceptualized based on the individual entrepreneur’s assessment of risk and uncertainty in a decision –What are the benefits and costs of a decision?

11. How can I mitigate risks? Successful technology entrepreneurs often manage risk and uncertainty by engaging in activities to reduce the risk that their new ventures face: –searching for information, –minimizing investment, and –maintaining flexibility.

12. Risk reduction strategy 1 of 3 Searching for information Unsuccessful entrepreneurs often fire before they take aim. Developing business plans improves time to launch, drives higher sales, and enhances overall survivability of success of ventures –Demand research and analysis –Seek information that determines the accuracy of your assumptions and/or provides new insights into customers, competitors, etc.

13. Risk reduction strategy 2 of 3 Minimizing investment The Lean Startup, Eric Ries

15. Risk reduction strategy 3 of 3 Maintaining flexibility Flexibility reduces risk because it minimizes the probability that a downside loss will occur (especially when unexpected events become present) Be adaptive and find a market segment interested in your products –Even if your initial market target is unsuccessful

16. Summary Entrepreneurs are not inherently risk- seekers –We see risk differently