Financial institutions, banks or capital risk entities which are considering the possibility of investing money in a SME which desires to innovate or expand to produce and market new products, or in the case of an investment in new technology based firms (NTBF), there is a need to perform a specific risk analysis.

Also, whenever there is a need to grant a credit to a completely unknown company dedicated to a new technology development it is always very difficult to evaluate all the aspects of the risk involved, with the result that the conditions for the credit are often penalized by heavy contingency factors.

The main problem we face, is to evaluate the investment risk or credit risk in those companies where the activity is not well-known, and where the future economical growth of the company depends on so many unfamiliar factors for which there are no historical data directly comparable.

In these cases, for a good assessment of capital investment risk the investor will generally need to analyze many different economical factors related to the specific investment, such as: 

  • Product feasibility from technical point of view
  • Possibility of good market penetration of the company
  • Quality of the management organization of the company
  • Sector competitiveness
  • Financial suitability
  • Opportunity cost of the investment
  • Technology evaluation
  • Etc.

All these areas can be summarized into four big generic economical analysis modules:

  • Marketing analysis
  • Financial analysis
  • Technical analysis
  • Company analysis

At present, many different commercial software packages can be found in the market for the analysis of some of the above mentioned factors and modules.

However there is still no software available at present that can integrate the four analysis modules into one unique and complete capital investment risk assessment, that could answer to all, or almost all, questions of the investor, and give him a complete probabilistic risk assessment of the potential capital investment or loan.

The Cipratech program is intended to respond to this need by integrating the four analysis modules into one unique probabilistic risk assessment software using an event tree analysis methodology.

Cipratech will manage the four modules at the same time. Therefore the analysis of all the economical relevant factors will be considered for a global and unique capital investment (or loan) risk assessment.

The advantage offered to the end-user by Cipratech is that each of the four analysis modules can also be used separately to perform a specific financial, market sector or product/technology analysis.