Question

Before an angel investor is willing to loan money to Chloe so she can start a

private school, Chloe must create a defined exit strategy. What would the
purpose of the exit strategy be?
O A. To minimize competition from international companies
B. To enhance the possibility that the angel investor will be repaid
C. To ensure that government wage laws are followed
D. To avoid overpayment of corporate taxes

Answer 1

Answer: B

The investor wants to ensure that Chloe will be able to repay the loan she owes him/her. Option B is the only option that mentions loan repayment thus that would fit as the right answer.

Answer 2

Answer: B. To enhance the possibility that the angel investor will be repaid.

Explanation: Angle investor wants to be sure of what they are getting into and as such requires Chloe to come up with what is called an exit strategy which is very crucial as the future of a business might not be so certain. A business exit plan could be explained as a strategic workplan which a business owner may take at selling his business to investors either to make substantial profit or ensure damage limitation. Therefore, with a good exit strategy, business owners have a very good chance of making substantial profit or very little loss. This is why angel investor requires Chloe to come up with a defined exit plan, so they it can be sure that Chloe will repay her loan.