In order for an angel investor or venture capitalist to exchange capital for ownership in a business that is a sole proprietorship, which of these must happen?
A) The business must be re-formed as a partnership.
B) The owner must give up some control.
C) The owner must co sign on all loans.
D) The business must be re-formed as a partnership and the owner must give up some control.

Question

Quizplus · Accepted Answer

In order for an angel investor or venture capitalist to invest in a business that is currently a sole proprietorship, the business structure must change to allow for shared ownership. This typically involves re-forming the business as a partnership or corporation, which inherently means the original owner must give up some level of control to the new investors.

In Order for an Angel Investor or Venture Capitalist to Exchange