Final answer:
The given statement ``the founders of an entrepreneurial business must avoid personally lending money to the business, as such debts are considered to be unsecured investments that need to be paid back, should the business fail``` is True.
The answer is option ⇒1
Step-by-step explanation:
Founders of an entrepreneurial business should generally avoid personally lending money to the business. This is because personal loans made to the business are considered unsecured investments that need to be paid back, even if the business fails.
When a founder personally lends money to the business, it creates a debt obligation between the founder and the business. This debt is typically unsecured, meaning it is not backed by any collateral or assets of the business. In the event that the business fails, the founder will still be responsible for repaying the loan.
The risk of personally lending money to the business is that if the business is unable to generate sufficient profits or sustain itself, the founder may not be able to recover the loaned funds. This can result in personal financial losses for the founder.
Instead of personally lending money, founders should explore alternative financing options for the business, such as seeking external investors, securing loans from financial institutions, or utilizing other forms of business financing. These options can provide a more structured and secure approach to obtaining funding for the business, while minimizing personal financial risks for the founders.
The answer is option ⇒1