6/24/2009

Risk Management in a Nutshell

"'Risk Management' is the art and science of thinking about what could go wrong, and what should be done to mitigate those risks in a cost-effective manner.

"In order to identify risks and figure out how best to mitigate them, we first need a framework for classifying risks.

"All risks have two dimensions to them: likelihood of occurrence, and severity of the potential consequences. These two dimensions form four quadrants, which in turn suggest how we might attempt to mitigate those risks:



Read more in this VC Experts article.