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Analyze the benefit of taking the money versus losing control over your business. Provide a rationale with your response

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Bus.508 contemporary business;Week.10 discussion.1: ?Financial Management?;Your new small business has really grown, but now it needs a substantial infusion of capital. A venture capitalist firm has agreed to invest the money you need. In return, the venture capitalist firm will own 75 percent of the business, and you will be replaced as CEO by someone chosen by the venture capitalist. You will retain the titles of founder and chairman of the board.;Analyze the benefit of taking the money versus losing control over your business. Provide a rationale with your response.;ANSWER;It is indeed a very hard decision for someone to let go its shareholding and allow control to some other person for the company which is formed. But as a prudent business strategy one needs to decide upon the deal as the venture capitalist firm will provide equity to the company and will foster the growth of the company many times. What firm could have achieved in 5 year it could achieve in 2 years as it has capital.

 

Paper#22734 | Written in 18-Jul-2015

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