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You are a business consultant who works with new business owners. A new client wants to start a bakery and seeks your advice.
Based on what you’ve learned from the readings, discuss the advantages and disadvantages of using venture capital as startup funding for a business.
What approach would you recommend for the client based on your research?
In your response to your classmates, consider the following questions:
How does your approach differ from the recommendations of your classmates?
How might your recommendation change after reading your classmates’ recommendations?-
Respond to the prompt above in a minimum of 175 words.
Reply to these two classmate’s statements below whether you agree or disagree. State why and explain. or your faculty member. Be constructive and professional. You will respond in 100 words each statement.
1)When putting together a pros and cons list regarding feature capital as a startup funding her accompany like a bakery is critical. That option is considered in full picture.
Some of the advantages of venture is that there’s significant increased in capital especially for places like a bakery that try to expand aggressively or rapidly gain a large footprint venture. Capitalism can provide the necessary funds to accomplish stats requirement support expert. Guidance is another advantage because you are dealing with people who probably have their toes in the water, so they provide business strategies and insight would be considered alone. The disadvantages are that is a sense of loss of control or dilution of ownership, giving into capitalism often demands equity and decision-making power as an agreement for excepting their funds. If not negotiate correctly, the owner could lose significant percentage of the overall ownership of the company. And as a result, there could be a pressure to grow faster than intended turn their funding back or more organic growth model may tend to be a little slower. Pizza birthday party.
I would recommend in place of venture, capitalism and more foundational level approach for something like a small business load or even crowd funding crowd funding can be a great way to raise funds while building a solid consumer base and small business loans retain control of the ownership of the company, even though there is a repayment obligation.
2)Illinois banks will not make loans or accept deposits from marijuana companies. They do not want to be involved in something that is considered a federal crime.
That said, a person will need to do the following on their own:
Pay for the state license,
Grow (or purchase) the plants
Package them in state-approved containers
Have a safe place to keep their cash
These are difficult tasks that would be hard for an entrepreneur to handle on their own.
The advice and funding of a Venture Capitalist would be helpful to be successful (Hasse, 2020).
The pool of VCs is small enough without the added requirement of finding a VC to fund something illegal (at the federal level).
Everyone,
Do you feel VCs will be attracted to marijuana investments? Why or why not?
Reference:
Hasse, J. (2020). Even As Overall Deals Declined, VC Investments In Cannabis Nearly Doubled Over 2019. forbes.com
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