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) A. The business must be re-formed as a partnership.
B) B. The owner must give up some control.
C) C. The owner must co-sign on all loans.
D) Both A and B

Question

Quizplus · Accepted Answer

A sole proprietorship cannot issue ownership shares, so it must be re-formed as a partnership or corporation to allow for ownership exchange. Additionally, the owner must give up some control to accommodate the investor's stake.

In Order for an Angel Investor or Venture Capitalist to Exchange