Venture Capital Negotiation Analysis for Bimark Ltd: Entrepreneurship

This assignment analyzes the venture capital negotiation strategy of Bimark Ltd, a fashion and design startup targeting a wide age range. The student addresses key issues in securing funding, including company valuation, investment timing, and potential modifications to the management team. The analysis includes a critical examination of Felix Dennis's statement on the challenges of obtaining investment and the importance of legal advice. The assignment also provides an overview of Bimark Ltd's business model, highlighting its target market, product offerings, and current sales strategies, including the need for a robust online platform and physical stores. The company seeks 20% equity in exchange for venture capital funding.

UNIVERSITY NAME
Student’s name
Student’s ID
Entrepreneurship

Specific startup venture; Bimark ltd, a young company in fashion and design industry that is
targeting 15-60 years old market niche
Q4 Salient issues
The most important issue in entering negotiation with venture capitalist is the
valuation of the company shares. This will determine the size of the equity the
venture capitalist will get from you company after financing its start up. The
valuation must be correct such that it does not undervalue Bimark ltd startup idea
eventually leading to a scenario whereby the venture capitalist takes up the lion
share of the company or overvalue the company such that it will be hard for the
company to receive further assistance from the venture capitalist. (Bloomfield, 2008)
Another important issue to be noted by Bimark ltd is the timing of the investment.
After securing funding most of them come in trenches tied to certain milestones the
company would be achieving with time. The milestones must be timed appropriately
such that it does not get to a point where the milestones promised were not realistic
yet these milestones are tied to investments from venture capitalist that come in
installments. Therefore the company can find itself in difficult position if it does
not plan itself accordingly. (Sloane, 2007)
Modification of the management team, sometimes after the company or startup
secures investment it the creditors or the venture capitalist may need additional
personnel who are their trustees to be included in the management of the company
to ensure that the investment provided is put to the right use. This issue must be
addressed carefully in order not to relinquish certain important roles in the company
that need someone who fully understands the idea of the business. (Bloomfield, 2008)

Q5 Critical analysis of the specific statement
The statement given by Felix Dennis is valid when critically analyzed. The statement suggests
that it is quite difficult sometimes to obtain investors to fund a business idea. This is correct
because many of the startups would have to undergo rigorous tests by the investors to taste the
viability of the idea before agreeing to finance it. Therefore many startups will fall at this point
because the investors may request more study to be done by the bearers of the idea to make their
idea of business as viable as possible. This further study will require funding same thing they are
looking for therefore the idea may not proceed beyond this point. It is the bearers of the idea that
really understand it well but the investors may not go that far. The statement also notes that best
legal advice is the most important aspect of the funding that most be taken care by the startup
management lest they lose the whole venture to the capitalist. (Quindlen, 2014) This statement is
correct because each party has its own interest to take care of. The investors will want to get as
much as possible from their investments similarly the owners of the startup also want get
maximum as possible from the investments so each party needs to take care of own interest
which sometimes leads to one side getting more because that was entered into the initial
agreement. Another important aspect of the statement is the fact when the initial contracts is
being entered it may entered in rush to secure the funding but years later down the road some
pieces in the agreement that were not looked into properly when the contract was being
developed may come to haunt the owners of the Bimark ltd. (Wijbenga, 2013)
Q6 Bimark ltd is a young company in fashion industry targeting teenage market through to phase
where most of the people begin their retirement at the age of about 60 years. The company
develops designer outfits that embrace each of the phases along the age bracket of its target
market. The company seeks to fund its idea through raising capital via venture capitalist in
exchange of the 20% equity of the company shares. The startup as already begun implementing
its idea but it is not fully functional as it needs to setup a robust online platform that with good
user-friendly interface and functionalities that makes online shopping for its product as simple
and enjoyable experience to its target market. The company also needs to acquire and run more
physical shops or boutiques in strategic locations within London to serve it clientele. The

company is currently using social media pages for sales and from the results obtained the
company believes that implementing the startup in full will bear more positive returns.

References
Bloomfield, S. (2008). Venture capital funding. London: Kogan Page.
Quindlen, R. (2014). Confessions of a venture capitalist. New York: Grand Central
Publishing.
Sloane, P. (2007). The innovative leader. London: Kogan Page.
Wijbenga, F. (2013). Strategy and performan[c]e of venture capital-backed SMEs.
Capelle aan den IJssel: Labyrint Publication.