Market risk – n : one of the four categories of venture risk; the risk that the target market, or envisioned market, for a firm’s new products or services turns out to be substantially less attractive than originally expected; the likelihood that a company has overestimated the number of potential customers for its product, the price they are willing to pay, and/or the rate at which they are ready to adopt the new product or approach. Market risk can be caused by several factors, including: the company overestimating the number of customers, customers not finding a new product appealing, customers not being ready to adopt a new approach that your product requires, unanticipated competition, or an unanticipated replacement technology or product. The most common basis for market risk is a company simply overestimating demand, and therefore building sales forecasts around unrealistic expectations of customer interest in their product or service.

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Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
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