Terry Cross: Risk Mitigation and Intellectual Property

By Bud on September 22, 2008 TrackBacks (1) Comments (1)

Download iPod Video (46MB)

When approaching angel investors, managers of early stage businesses need to think out the potential points of failure in their business plans. Common risks include failure to meet sales forecasts and spiraling supplier costs. Intellectual property is often the only real asset that an early stage company possesses, and angel investors want assurance that it is protected.

Like this? Let us know with a $5 donation, so we can do more

Filed under: Angel Investing | Detroit, MI | Financing Innovation | Terry Cross

We continue our discussion with Terry Cross on angel investing with an explanation of the kinds of risks he is most sensitive to. For the most part, there is not a set of pat answers. Terry wants to see that company management has thought of potential points of failure in their business plan. Common ones include:

  • Missing initial sales forecasts by a substantial period of time.
  • Unfavorable changes in the cost of sourcing.
  • Distribution strategy failing to deliver.

An area of particular focus is intellectual property. Often, it is the only real asset the firm possesses. Because provisional patents are so easy to obtain, Terry has no real regard for them. He prizes full patents and, in some cases, trade secrets more highly.

1 TrackBacks

Listed below are links to blogs that reference this entry: Terry Cross: Risk Mitigation and Intellectual Property.

TrackBack URL for this entry: http://michiganinnovators.org/cgi-sys/cgiwrap/fpgibson/MI/mt41/mt-tb.cgi/257

» Angel Investors Pocket Knife - Terry Cross from bugtank.com

I recently watched both of the Terry Cross interviews on MichiganInnovators.org and am better for taking the time to do this.  Terry Cross has been angel-investing for 46 years and has “learned a few things” in his time.   I learned more ... Read More

Tracked on September 23, 2008 9:46 PM

1 Comments

Stephen Stortz III on November 18, 2008 6:20 PM
Until this interview, I have never heard of the concept risk mitigation in reference to entrepreneurial ventures. When thinking about the business plan, I typically only think about describing the business idea not potential risks involved with it. I find Terry Cross to be very informational about this topic along with intellectual property. I am currently working on a business plan, how do I avoid making crucial forecasting errors? And with this economy, will forecasting even be relevant in a prosperous economy?

Leave a comment

Sponsor Michigan Innovators
Promote innovation in Michigan.
Sponsor case studies and how-to's.