The Four FOAK Execution Risks Investors Want You To Explain

Investors don't know what FOAK execution risk is. But they worry about four other risks.

"Emin, you do not have any experience in battery technology or battery manufacturing. Why should we hire you to lead our gigafactory project?"

It was my pre-final interview at TVEL, a subsidiary of state nuclear corporation Rosatom, for the position of CEO of a newly formed company to localise lithium-ion battery manufacturing in Russia. They were worried about execution risk. A decade earlier, they had participated in the project to build Russia's first gigafactory near Novosibirsk. That project failed spectacularly, and so they knew first-hand all about execution risks.

When investors say they are worried about execution risk, they aren't worried about one thing. They are worried whether you can complete your FOAK on time and on budget. They are worried about whether the ramp-up stage will take longer than expected, or how quickly the scrap rate will decline. They are worried that your suppliers will ditch you at the last minute. And they are worried that the team you are hiring doesn't have the necessary experience.

Execution risk is not a single risk but a collection of risks: construction risk, ramp-up risk, supply chain risk, and team risk. However, the way you work on them and the way you position them before investors are two different things. Let me walk you through the positioning thing.

Start with construction risk

It is the most immediate of the four, and it serves well to pull the others together. Control of this risk is largely determined by whether you choose or not to hire an EPC contractor, and the reasons behind that choice. Hiring a major, respected EPC company with years of experience on similar projects usually has the most reassuring effect on investors. ATOME secured a Tier 1 EPC contractor for its Villetta green ammonia project and subsequently achieved significant fundraising success.

Going without an EPC is also an option, but your arguments have to be rock-solid. JR Energy Solution built its 500MWh lithium-ion electrode factory without an EPC in just nine months. They argued to their investors that, as they were building in an industrial park with all the infrastructure readily available, with their equipment provided by several of the investors, and with the team's deep experience in battery buildout and manufacturing, hiring an EPC would simply drive up the costs without meaningfully adding control.

Then layer on ramp-up risk

Building factories or projects is one thing; making them operate to design parameters is another. The pilot-demo-FOAK path exists specifically to work out ramp-up technical difficulties before full commercial deployment. For your investors, list the key ramp-up risks you and your team identified for each stage of that path, and put your main mitigation measures opposite them. Then find examples from adjacent industries or projects to demonstrate why your assumed timelines are relevant and what usually goes wrong. Nothing beats good anecdotal evidence from similar projects.

Where possible, outsource the ramp-up risk altogether. Some industries have what are known as "foundries" — facilities that can produce a small pre-commercial batch, or even a small commercial-grade batch, of similar products. They usually have the know-how and the supply chain in place and can incorporate your design relatively easily. JR Energy Solution provides exactly this service for battery startups looking to make their first commercial-grade batch: they help adapt the design to large-scale manufacturing, spot and resolve problems in the ramp-up phase, and train their customers' teams to work at scale.

Supply chain risk is often overlooked

It has come into the spotlight since COVID and the wars in Europe and the Middle East. In March 2026, while I was at the annual InterBattery show in Seoul, I met many Westerners asking if they could get a 100% China-free battery supply chain — something unheard of just a year earlier. But geopolitical risks aside, FOAK founders should worry more about their suppliers quietly deprioritising a small and risky startup in favour of a rush order from a long-established client.

The best way to demonstrate supply chain risk control is to have your critical supplier on your cap table. This sounds just a shade easier than getting rich by being born into a rich family. And yet, in FOAK projects, equipment finance or direct supplier participation is not as uncommon as you might think. It requires a high degree of trust from suppliers for the founding team, but if you have spent a long time in the industry, it is likely that you have developed exactly such relationships.

Lacking that, you'll either need to demonstrate a diverse pool of suppliers who could be swapped with relatively low cost and friction, or have a supplier who is invested in your project in some other way — another startup relying on your project to demonstrate its product, or an established company looking to showcase its products in a cutting-edge application. Lacking all of that, your only chance of demonstrating at least some measure of supply chain risk control is to have a procurement manager with deep, longstanding ties to your key suppliers.

And finally, the team risk — the most overlooked of all

You already know the many challenges of designing, selecting, and bringing together a team for a FOAK. But this is not what investors usually want to hear about. What you have to demonstrate to them is that your team, especially its C-Suite, has the experience to cover the key risks of your specific project. If supply chain risk is a key risk for your FOAK, then investors would like to shake hands with someone who has sourced from those exact suppliers for many years and now works for you.

You also know how challenging it is to hire experienced operators full-time at FOAK stage. For any major risk that you cannot cover by bringing on someone who has done it for the last twenty years, the next best thing is to bring the same kind of person on as an advisor. This way you save the money you would otherwise have to pay a similarly qualified full-time hire, you get the experience that investors want to see, and you actually get some good and practical advice along the way.

The investor checklist is a goldmine, not a hurdle

Earlier in my career, I would often read a social media post or a Substack article by an investor and wonder about their seemingly limited understanding of risk. What I faced with as an operator, and what I've seen wrecking companies, rarely matched what investors preached. Later, I realised these are exactly what founders should be reading — they tell you precisely what to focus on in your investor dialogue.

If you have already worked through the frameworks for each of the four risks above, you already know pretty much all of the known unknowns of your project, and you know how to mitigate or insure against them. When talking to investors about risk mitigation, the goal isn't to show how deeply you've thought about risks. The goal is to demonstrate that you tick all the boxes on the investor execution risk checklist. That checklist is shorter and more pattern-matched than most founders expect.

If you're a few weeks out from a major raise and your execution risk story still feels like a collection of slides rather than a single coherent argument — covering EPC choice, ramp-up plan, supplier exposure, and team gaps in one breath — that's the kind of work I do with founders. Sometimes, the difference between a defensible answer and a confident one is just a fresh set of operator eyes that has been on the other side of the table.