An Option for Acquiring Equity Capital Is for the Entrepreneur

question 9

True/False

An option for acquiring equity capital is for the entrepreneur to take on partner(s)however, it is important that (s)he consider the impact of giving up some personal control over operations and sharing profits with others.

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Definitions:

Negative Externalities

Unintended and adverse side effects suffered by third parties or the environment as a result of economic activities.

Direct Controls

Government policies that directly constrain activities that generate negative externalities. Examples include maximum emissions limits for factory smokestacks and laws mandating the proper disposal of toxic wastes.

Economic Efficiency

A situation where resources are allocated in a way that maximizes the net benefit to society or achieves the desired output with the least waste.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction or activity, not reflected in the transaction's price.