Trevon is opening a cookie bakery in his small town. He is saving the funds that he needs to open his business and is considering crowdsourcing the last $10,000. He has already saved $60,000 to buy the needed equipment and get through a few slow months. A friend suggests that he find a venture capitalist. Is this a good suggestion?

Question

Trevon is opening a cookie bakery in his small town. He is saving the funds that he needs to open his business and is considering crowdsourcing the last $10,000. He has already saved $60,000 to buy the needed equipment and get through a few slow months. A friend suggests that he find a venture capitalist. Is this a good suggestion?

A.No, venture capitalists are only for tech businesses.
B.No, venture capitalists tend to invest in higher risk businesses.
c.Yes, they will likely want to invest much more than the $10,000 he needs.
D.Yes, this is exactly the kind of innovated business venture capitalists prefer.

Answer 1

B. No, venture capitalists tend to invest in higher risk businesses.

Venture capitalists typically look for high-growth potential and scalable businesses, such as tech startups, rather than small, local cookie bakeries. Additionally, venture capitalists often require a significant amount of equity in exchange for their investment, which may not be ideal for Trevon's situation. Crowdsourcing or seeking a small business loan may be more appropriate options for him.