Risks And Ethical Issues Assignment Analysis

Running head: RISKS AND ETHICAL ISSUES
RISKS AND ETHICAL ISSUES
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Name of the University
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RISKS AND ETHICAL ISSUES
1
Executive Summary
The foremost objective of this project is to comprehend the theory of risks and ethical issues that
need to be considered when launching a start-up business. The following section of the project
highlights three risks that need to be considered while launching or investing in a start-up from
the viewpoint of entrepreneurs and investors. The project also discusses the three ethical issues
that are essential to be considered when launching or investing in a start-up from the viewpoint
of entrepreneurs and investors. The project analyses the top three issues from the previous
sections and discusses the mitigate risk. Lastly, the project concludes with a summary of the
entire project.

RISKS AND ETHICAL ISSUES
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Table of Contents
Introduction..........................................................................................................................3
Discussion............................................................................................................................3
Risks for launching and investing in a startup.................................................................3
Principal Risk for investors........................................................................................3
Funding risk for entrepreneurs.....................................................................................4
Dilution risk for investors............................................................................................4
Ethical issues for launching and investing in a startup....................................................5
Social sustainability for investors................................................................................5
Environmental sustainability for investors..................................................................5
Ethical funding for entrepreneurs................................................................................6
Top three risks/ethical issues...........................................................................................6
Funding risk for entrepreneurs.....................................................................................6
Dilution risk for investors............................................................................................7
Environmental sustainability.......................................................................................7
Conclusion...........................................................................................................................7
References............................................................................................................................9

RISKS AND ETHICAL ISSUES
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Introduction
The startups are subject to different types of risks for entrepreneurs and investors, which
are important to identify and understand. This white paper is focused on the identification of the
several risks associated with the entrepreneurs and the investors related to startups. The white
paper discusses the perspectives of different entrepreneurs and investors regarding the different
risks associated with investing and starting a new business. Moving forward, the white paper also
mentions the ethical issues for investors and entrepreneurs concerning startups. In addition to
this, the paper then selects the top three risk for the investors and entrepreneurs and provide
practical strategies to mitigate those risks that are associated with new business ventures. These
strategies are provided by keeping in view different circumstances and resulting in a win-win
situation. In the end, a short but comprehensive conclusion is providing to summarize the
findings effectively.
Discussion
Risks for launching and investing in a startup
When an entrepreneur launches a new business, or an investor invests in the startup
venture, there are certain risks associated with new business and investment. The following are
the three major risks associated with launching a new business and investing in a startup.
Principal Risk for investors
According to Widyasthana et al. (2017), the investment by an investor in a startup will
put the entire amount of capital at risk because the future of the startup is uncertain. There is no
performance of the past based on which the investor can judge the probability of return. When
an investor invests in running a business, the uncertainty and principal risk are much lower than