An Investor Who Wants to Invest in Only One Start-Up

question 6

Multiple Choice

An investor who wants to invest in only one start-up business is trying to decide between two new businesses. The entrepreneurs in both businesses seem quite similar to the investor. However,they are not similar. One has much better skills than the other,who is misrepresenting his skills. The investor is facing the situation known as

• A) equity apprehension.
• B) breakeven syndrome.
• C) adverse selection.
• D) covenants.
• E) cash flow condition.

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Definitions:

Density of Distribution

The measure of how extensively a product is made available to customers through the distribution channels.

Firm's Products

The goods or services offered by a business to its customers.

Intensive Distribution

A strategy employed by companies to distribute their products through as many outlets as possible to maximize product availability and consumer access.

Exclusive Distribution

A distribution strategy where a supplier grants exclusive rights to a single wholesaler or retailer to sell their product in a specific territory, limiting competition.