Oliver is interested in selling shares of his company to raise additional capital. He knows some investors who might be interested. While no repayment

Question

would be required for this type of financing, what would be the biggest disadvantage that Oliver should understand before choosing this option?
A.
B.
C.
D.
He would be required to pay interest even if the business did not make money.
He might lose his seed money to his investors..
He might need to put up some form of collateral as security.
He could give up some ownership and control of his business.

Answer 1

The biggest disadvantage that Oliver should understand before choosing to sell shares of his company to raise additional capital is:

D. He could give up some ownership and control of his business.

When a company issues shares to investors, it dilutes the ownership stake of the original owners, which can result in less control over business decisions.