When Using Equity Financing from Family and Friends

question 20

Multiple Choice

When using equity financing from family and friends:

• A)business arrangements should be in good faith.
• B)details such as terms of the investment and rights of the investor need not be in writing.
• C)they can be more patient than other investors in when they expect a return on investment.
• D)since the amount of money is usually small,they do have an ownership position in the venture.

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Definitions:

Human Contact

The interaction between individuals, providing social and emotional support.

Work Sharing

a strategy designed to reduce unemployment or workload for individuals by distributing tasks among a larger group, thereby also potentially reducing working hours for each participant.

Seniority

The concept of giving priority or advantages in a workplace based on the length of service or time an individual has been in a position.

Reduced Earnings

A decrease in the net income that a company generates over a defined period compared to past performances.