Assignment
Using the information below, answer the questions in this assignment.
Weasley's Wizarding Wheezes is a small, family-owned business created by twin brothers, Fred and George Weasley. These two young entrepreneurs created their business after conducting market research and product development using their classmates at boarding school. This early stage market research was internally funded by the twins, with a large capital infusion from a wealthy angel investor, Harry Potter.
Following an early departure from boarding school, the twins used their remaining capital to open a small shop in a popular retail location to sell their product. The enterprise was an immediate success and the twins are looking to expand their business. Unfortunately, they are living in a period of political uncertainty, so they would like to open an online presence, as well as expand internationally. Also, as members of the area national guard, either of them could meet their end soon, and the continuation of the business is a concern.
Fortunately, their business is governed by a low-tax regime, and there seems to be a significant demand for its products. Unfortunately, they are not necessarily the type of people who abide by the rules, and thus any investor would have significant worries about how they would use the money. As a business consultant, they have come to you for advice on moving their enterprise forward. In no more than one page.
A. At what stage of business development are they in the venture cycle?
B. Given where they are at in their development, what sources of financing are likely to be available for them?
C. What type of business structure would you recommend for them as they seek to expand their operations? What are the advantages this structure would offer relative to the alternatives? Consider what forms would best protect the interests of the future investors, as well as other considerations.
D. What are the disadvantages of using your chosen business form? How will it affect your ability to grow in the future?
E. Given the types of products Weasley's produce and sell, is there any advantage to using intellectual property protections? What would be the disadvantage of seeking IP protection?
Understand that there aren't necessarily one right or wrong answer. For example, you can feel that one business form would be better than the others. The case is ambiguous enough that several business forms could work equally well. I am not looking for a set answer, only evidence that you are considering the relevant factors in making your decision.