Final answer:
An entrepreneur faces the significant risk of financial loss when starting a new business, especially in the case of a sole proprietorship where the entrepreneur is personally responsible for the company's debts.
Step-by-step explanation:
One significant risk for an entrepreneur when starting a new business is financial loss. As entrepreneurs invest their own capital into their ventures, they demonstrate a strong belief in the business's prospects. However, any young startup firm is a risk, and the founder is responsible for the debts and obligations of the company.
This risk is heightened in the case of a sole proprietorship, where the entrepreneur faces unlimited liability and is personally accountable for the financial health of the business. Despite the potential rewards, such as monetary success and bringing innovative products to the market, the risk of financial loss can be substantial and must be weighed carefully against the potential benefits.