Lucy started a business called StaffordWelly. It makes boots with a high heel to appeal to women and festival-goers.
Lucy wanted to expand StaffordWelly but needed additional capital. They appeared on the television programme SharkTank.
One of the venture capitalists (a Dragon) invested £500 000 for a 20% stake in the business.
Which ONE of the following is a disadvantage to Lucy of a venture capitalist investing in her business?
Select ONE answer:
- It will reduce the control of the existing owners
- The venture capitalist risks losing their investment
- Higher corporation tax will need to be paid
- The risk of WedgeWelly failing is reduced
Show the workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Business Studies KS4 & KS3 classes
The answer is 1 – the other answers would not be a disadvantage of a venture capitalist investing in her business.
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