Professional Documents
Culture Documents
Risk management is a discipline for dealing with the possibility that some future event will cause
harm. It provides strategies, techniques, and an approach to recognizing and confronting any
threat faced by an organization in fulfilling its mission.
Reference :
http://www.allianceonline.org/FAQ/risk_management/what_is_risk_management.faq
Risk management ensures that an organization identifies and understands the risks to which it
is exposed. Risk management also guarantees that the organization creates and implements an
effective plan to prevent losses or reduce the impact if a loss occurs.
A risk management plan includes strategies and techniques for recognizing and confronting
these threats. Good risk management doesn’t have to be expensive or time consuming; it may
be as uncomplicated as answering these three questions:
identifying risks. Having a clear understanding of all risks allows an organization to measure
and prioritize them and take the appropriate actions to reduce losses. Risk management has
other benefits for an organization, including:
• Saving resources: Time, assets, income, property and people are all valuable resources
that can be saved if fewer claims occur.
• Protecting the reputation and public image of the organization.
• Preventing or reducing legal liability and increasing the stability of operations.
• Protecting people from harm.
• Protecting the environment.
• Enhancing the ability to prepare for various circumstances.
• Reducing liabilities.
• Assisting in clearly defining insurance needs.
An effective risk management practice does not eliminate risks. However, having an effective
and operational risk management practice shows an insurer that your organization is
committed to loss reduction or prevention. It makes your organization a better risk to insure.
• People are now more likely to sue. Taking the steps to reduce injuries could help in
defending against a claim.
• Courts are often sympathetic to injured claimants and give them the benefit of the
doubt.
• Organizations and individuals are held to very high standards of care.
• People are more aware of the level of service to expect, and the recourse they can take
if they have been wronged.
• Organizations are being held liable for the actions of their employees/volunteers.
• Organizations are perceived as having a lot of assets and/or high insurance policy
limits.
Reference : http://www.ibc.ca/en/Business_Insurance/Risk_Management/
Angel investors, or individuals who invest in private companies, may be more important to the growing
economy and the advancement of technology than any other source of capital. Angel capital is critical to early
stage companies.
According to an estimate by the Center For Venture Research, University of New Hampshire, 50,000
companies received $40 billion dollars of angel funding for the year 2000 and there are about three million
individuals in the United States that have made an angel investment. Since there are no reporting
requirements for private investments, these estimates may be substantially lower than reality. Comparatively,
approximately only 7000 companies received capital from venture capital firms in 2000 and of this, only 28%
was invested in early stage companies.
In addition to the money they invest, angel investors act as mentors and advisors to their portfolio companies
providing much more than just dollars.
Reference : http://www.angel-investor-news.com/ART_angelpower.htm
Venture capital can be defined as funds that are generally invested in the
form of equity or quasi-equity which rarely affords any guarantee.
Investments may take the form of simple shareholder's equity (common
or preferred shares), as well as options, warrants, convertible debentures
and other vehicles. The structure of the investment generally depends on
the company's needs and its stage of development, taking into account
the objectives of both the entrepreneur and the investor.
As a result, this form of financing is risky, which the investor hopes will be offset by a
proportional return on his investment. The return is generally realized out of the capital gain
or the increase in the company's share value.
INVESTMENT STRATEGY
1. They all strive to invest their money in companies that offer strong growth
potential and a promising strategic position on their respective markets.
INVESTMENT CRITERIA
- the market
The management team is the key to a company's success and an important criteria for the
investor. A strong, dynamic, highly committed team is essential. In addition to being
motivated and competent, the team must have a clear and realistic strategic vision of the
company's future growth, and be familiar with sound management techniques.
In addition to solid management, venture capitalists have a preference for companies with a
unique technology or market approach, and that hold a promising strategic position on their
respective markets.
In short, all these factors must convince the investor that the company's growth potential and
its capacity to yield the desired return are real.
Reference : http://www.reseaucapital.com/Association/Venture_Capital.html
Those regulations and policies can be summarized as follows: