NOTE:- The discussions on this website are intended only to provide a brief overview of some of the risk factors that prospective investors should be aware of. These are not intended to constitute a complete statement or to substitute for the normal due diligence, consultation with a qualified and trusted investment advisor etc that any prudent investor would normally be expected to carry out.
Intending investors are strongly urged to read the Disclaimer Statement in conjunction with these risk factors and to contact us in case they need any clarifications, additional information etc.
RISK FACTORS DISCUSSION:-
(Investing & Entertainment -- Two Equally Risky Businesses?!!)
Our interest in early-stage technology investing and our work with people having great ideas (to help them make the "Idea' to "Company" transition) have a common motivation. We strongly believe that these activities contribute to the economy and also deliver superior returns. These returns can be significant for those who are able to consider all the factors holistically to arrive at an informed judgment.
However, investments in technology start-ups (or in "Ideas") also generate an additional set of risks over and above the conventionally encountered investment risk factors. The higher rewards possible through such investing are thus coupled with higher risks as well.
One immediately obvious reason for this linkage is that both (the rewards as well as the risks) are causated by the same set of factors. The superior returns possible from technology sector investments flow from the dynamic (and hence difficult to forecast/assess) nature of the technology sector. This same dynamic, difficult to forecast nature of the sector however also increases the risks of being wrong.
The risks can be "false positive" risks as well as “false negative" risks. A certain level of trade-offs is possible within these two categories. “Ceteris paribus”, and as a conservative investment measure, our investment bias generally lies towards reducing the “false positive" risk first.
Technology is almost always a necessary factor in our investment decisions, but it is not a necessary and sufficient factor. Our investment decisions are almost never triggered by Technological IP in isolation. This is especially so since, as mentioned above, our evaluation bias is towards first reducing the "false positive" risks.
The next page briefly discusses some of the underlying factors that drive early-stage technology investing risks.