Monte Carlo Risk Analysis
and Due Diligence of New Business Ventures
By James F. Wright
A step-by-step process that
shows bankers, venture capital companies, and investors how to measure the real risks of
highly complicated projects.
When it comes to new manufacturing processes and products, many investors fail to look
past the novelty of the new, putting blind faith in potentially faulty business plans.
Now there's a way to accurately measure the real risks of highly complicated projects.
Wright outlines a step-by-step process that shows bankers, venture capital companies, and
investors how to:
• Determine if technologies are valid to ensure, for example, that pilot-plant results
can be duplicated at full-scale
• Use process design methods to analyze new and emerging technologies used in proposed
investments
• Use the author's scientific approximation to handle unsymmetrical distributions
common in the evaluation of potential investments
• Use Monte Carlo Analysis to quantify the uncertainty of a plan-and determine the
potential for making a profit.
About the author
James F. Wright, Ph.D. (Odessa, TX) is a physical chemist, project director, and an
experienced chemical, process, nuclear, and environmental consultant.
