Final answer:
Leadership is critical in the early stages of a business due to the high risk of start-up failure, and it plays a vital role in overcoming information gaps and securing essential support from investors.
Step-by-step explanation:
Leadership is especially important at the beginning of a business because start-up failure rates are high. Founders have a deep understanding of the commitment required for success and show their belief in the business by investing their own finances. Support from angel investors and venture capitalists is crucial as they provide not only funding but also guidance to bridge the gap created by imperfect information about the firm's prospects.
Sometimes, businesses struggle or fail due to various factors such as poor management, non-productive workers, strong competition, or unexpected shifts in market demand and supply that affect prices. The process of starting and maintaining a new business is risky, and strong leadership helps navigate these challenges to increase the likelihood of success. Hence, leadership is key in steering the company through the uncertain early stages and laying a strong foundation for the future.