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Five Investor Issues to Consider When Choosing a Business Form

One important aspect in deciding what form a business should take is the type of investors it has or is seeking. For example, a venture capitalist will want an exit strategy several years down the road, often through the company making an initial public offering (IPO). To go public, the company must be a corporation. Below are some questions to consider when deciding how the makeup of your investors will influence what kind of business will be formed.

Disclaimer

This publication and the information included in it are not intended to serve as a substitute for consultation with an attorney. Specific legal issues, concerns and conditions always require the advice of appropriate legal professionals.






1. Will the business be heavily dependent on investors for its capital?


2. What kind of investors is the company seeking?


3. What business forms are most attractive to investors?


4. Is a business goal to raise investment capital without giving up control of the company?


5. Might the business eventually become publicly traded?






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