Understanding our Risks

As with any start-up venture, there are a wide variety of risks that we could encounter. The key to managing these risks is to understand the possibility of them occurring and plan carefully as to how we would mitigate each risk should it arise. There are many different types of risks that we could face including legal, financial, technological & operational, market, and systemic risks.

Legal Risks

Market Risks

Technological and Operational Risks

Financial Risks

As a technology-based company, financial hurdles are likely to be significant for us, particularly for early research and development activities as well as for production. As such, there is always risk that we will not be able to secure the required funding for each stage. In order to mitigate these risks, we have developed a comprehensive budget for the next three years. This budget will be updated as cost projections change and will allow us to carefully plan our spending. In addition, should we find ourselves in a position where we require extra finances that we cannot acquire, we will suspend all research and development activities not focussed on getting first generation products to market in order to reduce our budget.

Systemic Risks

Finally, systemic risks are an important category to consider. In terms of FREDsense technologies, this could involve drastic changes to government-mandated regulation in the oil and gas sector. As our market opportunity is largely due to significant changes that affect regulated monitoring in Alberta, this could drastically affect the usefulness and viability of our products. Although this is extremely unlikely, as trends seem to suggest that regulation will increase in the industry, it is still important to consider. In the event that this occurred, we would shift our focus to target other more stable markets. Again, as much of the research and development activities of FREDsense focus on developing our versatile detector platform, transitioning into another market using this would not represent a serious setback in terms of timelines.

Risk Factor Analysis

In order to start designing a comprehensive strategy to minimize our potential risks, we have done a risk factor analysis. We have identified some of the key risks that our start up could face as well as the type of risk and likelihood of occurring for each. We then came up with possible mitigation strategies and their relative cost. Although this likely does not cover all of the possible risks that we could face, starting our risk assessment early will hopefully help us avoid making crucial mistakes.

SWOT Analysis

In order to better understand our position in relation to risk, we performed a SWOT analysis. Here we identified four key areas: our strengths, weaknesses, opportunities and threats.

Key Strengths and Weaknesses