What are the core steps of risk management in startups?

• A. Identify, assess, and mitigate risks.
• B. Plan, implement, and celebrate.
• C. Budget, forecast, and dream.
• D. Hire, train, and fire.

Answer: (A)

Risk management in startups follows a simple, proactive cycle: identify potential risks, assess their likelihood and impact, and mitigate them. By starting with identifying threats—from market demand swings to funding gaps, technical hurdles, or regulatory changes—you surface what could derail the venture. Then you evaluate how likely each risk is and how seriously it would affect progress or finances, so you can prioritize those with the biggest potential harm. Finally, you take actions to reduce either the chance of those risks materializing or the damage if they do, such as building flexible product tests to validate demand, securing diverse suppliers, creating contingency plans, or establishing prudent financial cushions. This three-step structure—identify, assess, mitigate—captures a disciplined approach to managing uncertainty that is essential for startups. The other options describe activities that aren’t a focused risk-response process: planning, implementing, and celebrating is too broad; budgeting, forecasting, and dreaming centers on financial planning and aspiration; hiring, training, and firing is about people management rather than systematically addressing risks.