FA-201c · Module 3

Risk Reporting

3 min read

Risk reporting is where most board presentations fail — not because risks are hidden, but because they are presented without quantification or probability. "Customer concentration is a risk" is a statement. "Our top 3 customers represent 34% of ARR, and the loss of any one would reduce net retention below 90% and extend runway from 19 months to 13 months" is a risk assessment. The first creates anxiety. The second enables planning.

Top 5 Financial Risks — Q2 2026
────────────────────────────────────────────────────────
Risk                 Probability  Impact     Mitigation
────────────────────────────────────────────────────────
Top-3 customer       15%         ($2.4M     Multi-thread all
churn                             ARR)      top accounts; QBRs
                                            monthly vs. quarterly

Enterprise cycle     35%         ($800K     Expand mid-market
extension >20 days               Q2 new)   pipeline to offset

Key hire departure   20%         ($600K     Retention packages;
(2 senior AEs)                   Q2-Q3)    succession planning

Competitor pricing   25%         ($400K     Value engineering
aggression                       margin)   training; avoid race

Cash runway <12mo    10%         Forced     Bridge round terms
(downside case)                  raise      pre-negotiated
────────────────────────────────────────────────────────

Each risk quantified by probability, impact,
and mitigation — not just named.

Do This

Quantify every risk with probability, financial impact, and mitigation plan
Rank risks by expected value (probability x impact) to prioritize board attention
Update the risk register quarterly and show how risks evolved from prior quarter

Avoid This

List risks without quantification — "market competition" is not a risk assessment
Present risks without mitigation plans — that creates anxiety without agency
Only report new risks — show how previously flagged risks were resolved or escalated