In　order　to　effectively　avoid　risks　that　might　result　in　loss　of　failure　in　software　development　process,　based　on　the　experiences　of　software　development　and　project　management,　this　paper　identifies　4　potential　risk　factors　specific　to　software　development　projects　which　are　integrated　with　6　stages　in　software　development　process,　and　proposes　a　non-linear　programming　model　to　optimize　funds　allocation　to　reduce　the　risks.　The　paper　provides　an　example　to　validate　the　effectiveness　of　the　model.　©　2008　IEEE.