What Are the Disadvantages of Distributing Founder Shares Equally Among

question 10

Multiple Choice

What are the disadvantages of distributing founder shares equally among all co-founders?

• A) The lack of a primary shareholder slows down the decision making process
• B) CEO may be doing as much work as CEOs of comparable companies, but have less potential upside
• C) Such distribution makes unwanted acquisitions easy
• D) A and B
• E) A and C

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Definitions:

Learning Goal Orientation

A mindset focused on developing competence and mastering new skills, as opposed to proving competence or comparing oneself to others.

Performance-Prove Orientation

A focus or attitude where individuals are driven to demonstrate their competencies and skills in order to be positively evaluated by others.

Performance-Avoid Orientation

A focus on avoiding tasks due to fear of failure, leading to a tendency to sidestep challenges to prevent a poor performance evaluation.

Expectancy Theory

A motivational theory suggesting that individuals are motivated to act in certain ways based on the expectation that their actions will lead to desired outcomes.