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Without plagiarizing describe how will you protect you and your business from loans or investor agreements?...

Without plagiarizing describe how will you protect you and your business from loans or investor agreements? For instance, what legal measures will you put into place to ensure loans and investors are repaid so your business avoids bankruptcy. What factors for Venture Capitalists would you consider when making a decision to invest? How would your proposed business be viewed using these factors?

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To protect you and your business from loans or investor agreements should be drawn and entered into in a careful manner by you. For instance while taking a loan be sure to negotiate an acceptable interest rate and a rate that can be serviced easily by you on a regular basis. Thus the primary and the most important thing that you will have to do is to negotiate an acceptable interest rate as well as repayment schedule and get this on the agreement. Secondly you should review the default provisions set out by the lender to ensure that they are realistic given your business model and revenue and profit projections. This will help in ensuring that the covenants and its terms and conditions will be met by you. Before signing the loan agreement or the investment agreement negotiate the substance of each covenant in such a manner that your company’s ability to comply with the covenants and requirements are not diluted in any manner. Seek to soften the default provisions being put in the legal document and include sufficient and adequate cure periods for any breaches. Also incorporate a minimum as well as maximum dollar limit. Also, in the legal document, insist on stopping and ceasing of the penalties once the concerned default has been waived.

The factors for Venture Capitalists (VCs) that I will consider when making a decision to invest will be factors like business model of the company, scalability of the business, exit opportunities for the VC and the competitive advantage of the business. My proposed business will be viewed favorably using these factors as I am in the business of providing educational software to schools and colleges and the business model is unique as my consumers are locked in at the start of subscription and they pay the annual fees upfront. Thus I receive my revenues at the start of the year while my expenses keep on recurring throughout the year. Also I am serving under-penetrated markets like Serbia, Bolivia, Afghanistan, etc.

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