KNOW OPERATIONAL REGULATIONS
“ After all , startups by their very nature are often helmed by inexperienced entrepreneurs [...] and usually require careful guidance to lead their product or service from conception to implementation ”
of dollars to developing it . As such , strong risk management practices are essential to ensure that firms deploy their funds in the most optimal way .
KNOW OPERATIONAL REGULATIONS
“ For us , no idea is too early : our door is always open . We want to be your partner in the first round . Then be there for multiple rounds . We ’ re long-term , patient partners . With you through the cycles ,” says Australian VC firm AirTree , which recently provided startup Open with AU $ 3.1mn ( US $ 2.2mn ) in top-up funds . Getting involved with prospects at an early stage and in a holistic manner can be an effective method for stymieing elements of investment risk , particularly in the highly regulated finance and insurance sectors .
Moreover , in its article ‘ Value and resilience through better risk management ’, McKinsey & Co adds that a comprehensive understanding of the regulatory framework within which a company operates stands the investor in good stead to anticipate larger issues : “ Geopolitical uncertainties alter business conditions and challenge the footprints of multinationals . Corporate reputations are vulnerable to single events , as risks once thought to have a limited probability of occurrence are actually materialising .”
Regarding the latter point , policy and necessary operational changes resulting from the COVID-19 pandemic could be cited as an example . In such eventualities , BCG cites the importance of capturing and analysing market data constantly in order to gain insights into what new products and services are experiencing positive gains . Such an approach could require additional VC investment in AI ( artificial intelligence ) or ML ( machine learning ) data analytics tools , which , although initially incurring upfront costs , could ultimately save money through better market forecasting and less negative investment .
67 fintechmagazine . com