ABSTRACT
Every business plan requires a statement of risk, in which you tell investors what a high-risk investment this is. Make it clear that nothing is guaranteed. No entrepreneur likes a risk statement, but it is a protection for you. In a limited liability company (LLC) or limited partnership, your attorney will insert one whether you like it or not. You are well advised to do this in any proposal for funds. With a risk statement included in your business plan, investors cannot later claim that they did not know that the investment was unpredictable. Even though it seems obvious to you, and probably to them, assume nothing and state the facts anyway. If things should go awry and people lose money, they tend to sue.
