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Outline, using examples, the relationship that can exist between 'Investors' and 'Entrepreneurs' in business. - Leaving Cert Business - Question 1(A) - 2011
Question 1(A)
Outline, using examples, the relationship that can exist between 'Investors' and 'Entrepreneurs' in business.
Worked Solution & Example Answer:Outline, using examples, the relationship that can exist between 'Investors' and 'Entrepreneurs' in business. - Leaving Cert Business - Question 1(A) - 2011
Step 1
Co-operative relationship
Answer
A co-operative relationship exists when investors and entrepreneurs work together towards a common goal, acting in a mutually beneficial manner (win/win). For example, when an entrepreneur is open and honest about business development, they can provide accurate information to investors. This allows the investor to assess potential risks and return on investment, making it easier for the entrepreneur to secure the necessary funds. An example of this can be seen in startups where investors provide capital in exchange for equity, and the entrepreneur focuses on growing the business.
Step 2
Competitive relationship
Answer
In a competitive relationship, both the investor and entrepreneur strive to gain the most benefit from the partnership, often leading to a win-lose scenario. Each party may try to outmaneuver the other for financial gains. For instance, an entrepreneur may wish to reinvest profits into new projects to expand, while the investor may want regular returns based on their initial investment risk. The tension arises as both parties work towards their goals, which may not always align, emphasizing the potential risks involved in their business interactions.