Risk is something of a mature subject. That’s not to say that risk is solely the providence of people past a certain age, but we become more aware of it as we age and mature. As kids we don’t ponder the idea of our own mortality or the possibility of failure; it’s less that we think that somehow everything will work out than we just don’t think. And we’re fortunate to have relatively low stakes at that age. Our bodies and our pride bounce back rather quickly.
Age and circumstance have a way of changing all that, though, in life as well as business. Adults have far more at risk than kids, and entrepreneurs and business owners have risks far beyond their fellow adults. But part of what being an entrepreneur means is looking at those risks and decidint to take the plunge anyway. And while those risks will never go away entirely, you can take steps to minimize them.
When starting a business, there are so many things to consider when considering risk. One of the most important steps you can take when getting started is forming a business entity. If you’re running a business without a business entity, you could be putting your personal assets at risk. And if you’re starting a business with co-founders, you could be putting the entire venture in jeopardy if you don’t have co-founder agreements in place.
Your business can also be at risk if you discuss it in too much detail in a public setting. If you plan to present at a trade show or other public forums, be sure to speak only in generalities when talking about your product. You should also exercise caution in pitch meetings with investors. While you don’t have to go to the extent of having accredited investors sign a non-disclosure agreement, it can be prudent to err on the side of saying less rather than more.
Perhaps the most important thing you can do to minimize risk is make sure all IP is assigned to your business entity. Having patents assigned to one member of your partnership is a recipe for disaster should that person decide to move on from the company. Assigning any and all IP assets to the business rather than an individual will help to avoid any post-split messiness and ownership debates that could derail the company.