Assess the value of venture capital as an external method of finance for Pura Cosmetics. - Edexcel - A-Level Business - Question 1 - 2022 - Paper 2

However, obtaining venture capital might require Rose Dyson to give up some control over her business in exchange for financial backing. This could limit her decision-making power in running the business. Moreover, she would need to share a portion of her profits with the venture capitalists, which might hinder her future earnings. There exists a risk of potential disagreements about business operations between her and the investors, especially since she would lose some autonomy in controlling Pura Cosmetics.

On the flip side, having the backing of a venture capitalist who has experience in the industry might provide significant resources and guidance. This support could enable the business to navigate challenges and expand successfully. Rose Dyson’s existing growth in the market could also indicate that her business has substantial potential, thereby attracting the interest of venture capitalists. This could pave the way for sustainable development without solely relying on retained profits for financing.

In conclusion, while there are some risks associated with venture capital, including loss of control and shared profits, the potential benefits—such as growth funding and expert guidance—could be crucial for Pura Cosmetics’ success in a competitive market.