New commercial landscaping technological processes and restructured

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New commercial landscaping technological processes and restructured

as a Limited Liability Corporation. Joe's is being considered as a

potential business investment,

"Business Venture Capital".

Buying an existing business can be an excellent way to become a

business owner or to expand your present business. You can save time

and effort of building a customer and supplier base. You may also

avoid the trouble of locating equipment and hiring and training

employees. However, you should abide by the Latin slogan which

translates "Let the buyer beware." If you are not careful, acquiring

an existing business can lead to disaster. (Poznak, 1998)

Joe's Landscaping and Tree Trimming (Joe's) began as a small sole

proprietorship. In efforts to expand and become a company that

investors would be interested in, the company has ventured into new

commercial landscaping technological processes and restructured as a

Limited Liability Corporation. Joe's is being considered as a

potential business investment, however, after reviewing the

requirements of the legal due diligence process, it is my

recommendation that an investment is not made into Joe's.

In the third quarter of 2002, investors pumped $4.5 billion into 647

entrepreneurial companies, a decrease of 26% from the prior quarter,

which saw $6 billion of funding to 838 startups. While IT startups

consistently gain venture capitalists' attention, software companies

continue to gather the largest amounts of cash despite a 10% drop in

funding from the prior quarter. Representing 22% of total investment

dollars, 180 software companies got funding, totaling $993 million.

"Software is once again leading VC back to its roots, being the

largest category in all of 2 but the last 10 years," says Tracy

Lefteroff, global managing partner of the venture-capital practice at

PricewaterhouseCoopers. He says that software companies are a safer

bet for investors, as they have lower initial capital requirements and

early milestones for achievements. (www.informationweek.com)

While startups at all stages are struggling in this down market, the

stakes are highest for new companies who want to gain first-time

funding. Only 159 entrepreneurs received first-time funding in the

third quarter, compared with 214 in the second quarter. Software

startups took 30% of that money. Overall, the tightened i...

... middle of paper ...

...ele. Since more revenue dollars are

used for labor expenses, it is imperative that management maximizes

the productivity they get out of their employees. (www.asbdc.com)

It is imperative to mitigate major risks when considering investment

opportunities. Potential liabilities are often over looked in the

excitement of the investment opportunity. Liability claims from

hazardous working conditions and potential environmental concerns

makes Joe's a risky investment. More research needs to be done to

ensure the company is utilizing environmentally safe products, tools,

and is creating opportunities to produce safer materials and

processes.

References

Arkansas Small Business Development Center. (2003, April). Retrieved

June 23, 2004, from http://www.asbdc.ualr.edu/bizfacts/8002.asp

Cuneo, E. C. (2002, October). More Venture Capitalists Keep Their

Wallets Closed. Retrieved June 23, 2004, from

http://www.informationweek.com/story/IWK20021028S0010?ls=TW_012803_fea&fb=20030128_software

Poznak, J. L. (1998, August). Buying a business: Let the buyer beware.

Retrieved June 23, 2004, from

http://www.keepmedia.com/ShowItemDetails.do?itemID=203222&extID=10032&oliID=213

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