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1 Business and Management Name Institution Course Date

2 a) What form of most likely business ownership did they (Claude and Mathieu) have prior to taking Dragons offer? Justify your answer (1 point) They had a partnership form of business. In the clip from Dragon's Den, Claude and Mathieu ran Zeronext, a cutting-edge company dedicated to developing and marketing energy-saving products and services. The video suggests that they were already working together as a business entity before accepting the Dragon's offer. When two or more people decide to work together to run a company, they create what is called a partnership. The members of a partnership work together to manage the company and divide the gains and losses equitably. In the instance of Zeronext, Claude and Mathieu's admission that they have worked together for years suggests that they split managerial duties. During their presentation, Claude and Mathieu showed excellent teamwork. They both took part in the pitch and addressing the Dragons' questions about the product. They demonstrated a shared knowledge of the industry and the ways in which their individual skillsets complimented one another. Mathieu was more concerned with the product's technical details, whereas Claude stressed its marketability and expansion prospects. In addition, the presentation emphasized the partners' shared sense of trust and confidence in one another. They responded in unison to the Dragons' criticisms and demonstrated agreement on how to take Zeronext forward. Such cooperative effort and mutual benefit are hallmarks of a successful cooperation. b) Are they (Claude and Mathieu) entrepreneurs or intrapreneurs? (1 point) Based on their behavior and goals, Claude and Mathieu fit the profile of entrepreneurs. Claude and Mathieu recognized a window of opportunity to pitch their business plan to the Dragons in exchange for funding to create their wine storage solution, Renoir (CBC, 2022).. Entrepreneurs often display traits like initiative, creativity, and a

3 willingness to take risks. During their presentation, Claude and Mathieu displayed these traits. They demonstrated the potential of their novel product by showcasing its salient qualities to prospective buyers. They presented their proposal in the Dragon's Den, a highly competitive setting, demonstrating their initiative and willingness to take risks. Furthermore, Claude and Mathieu's entrepreneurial spirit is evident in the fact that they created and successfully ran their own firm, Zeronext. They made the decision to launch a firm, create a marketable product, and actively seek out expansion prospects. c) What are the opportunities that Claude saw in the wine cellar industry? (1 points) Claude saw a number of openings in the market for wine storage facilities, and this motivated him to start working on a novel design for wine storage facilities. There was a lack of originality and aesthetic appeal in the current wine cellars on the market, and they were often located in dark, damp basements. Claude saw an opportunity to revolutionize the wine storage industry with a new method. The solutions presented to him were antiquated and out of step with modern tastes in home decor. Claude knew that wine cellars needed to serve their purpose while still looking good, so he set out to do just that. He imagined wine cellars that were also pieces of art, adding to the beauty of a space. Moreover, Claude saw a way to enhance the usefulness of wine cellars. Historically, wine cellars have relied on compressors to keep their temperatures stable, which has restricted their placement options and raised their energy needs. Claude's plan was to create an innovative wine storage system that would do away with the necessity for a compressor altogether. This new technology will not only reduce energy use but also make installation easier and more versatile.

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4 In addition, Claude observed that there were not many competitors in the wine cellar sector, suggesting considerable untapped potential. Zeronext might take advantage of this situation to become the market leader. With their revolutionary designs and compressor-free technology, Claude knew they could win over a large client base and get an edge over the competition in the wine cellar industry. d) Why do you think Claude was able to capitalize on this opportunity? (1 point) Not only did he see the benefit of their product in terms of size and technology, but he also envisioned a more creative manner of keeping wines inside the kitchen or anyplace else in the home except the basement area, which is the primary location for most people to keep their wine collections. They had the opportunity to market this product and technology not only to residences and hotels, but also to medical facilities, educational institutions, and the aviation business. e) What is Mathieu’s background and why do you think Claude got him involved? (2 point) Mathieu was a licensed professional accountant, and he specialized in working with small and medium-sized enterprises. Due to the fact that Zeronext is a startup, Claude need the assistance of a person who has comparable levels of professionalism or skills. f) What were the resources needed by Claude and Mathieu from the Dragons? (3points) Claude and Mathieu approached the Dragons for investment, asking for $500,000 in return for 20% of the company's stock. The whole amount of Zeronext was evaluated to be $2.5 million in this appraisal ( CBC, 2022).

5 This money was set aside to help with manufacturing and stocking their cutting-edge Renoir wine storage product. In order to get production up and running, a lot of money has to be spent on things like manufacturing equipment, raw materials, and overhead. To satisfy the first demand and launch a supply chain, procuring inventory is also essential.They could expand their operations and better respond to consumer demand with this influx of capital. Claude and Mathieu's estimation of their company's worth is reflected in the sum they were seeking in financing. They gave a sizable ownership share in return for financing because they thought Zeronext might become very successful and develop rapidly. The Dragons' interests would be aligned with the performance and potential worth of Zeronext if the firm was valued at this point. g) What type of investors were Dragons? Explain your answer (4 points) They are Angel investors. The dragons collaborate with business owners and have the ability to invest whatever amount that the business owners want in return for a portion of the company's shares. h) Do you agree with the offer taken by Claude and Mathieu? Would you have taken a different offer? Explain your answer on why you agree or not agree? (4 points) No. I do not agree with the decision that Claude and Mathieu made on the offer. This is due to the fact that the investors were granted a percentage stake equal to forty percent of the business, which is a greater amount than Claude and Mathieu's shares. Claude and Mathieu controlled 30 percent of the company's stock, while the investors owned 40 percent. Thus, if the business fails, the dragons may fire any partner. I would have taken a one- million-dollar offer for 20% of the company's equity. J) What are the advantages and disadvantages of acquiring funding from the Dragons

6 versus obtaining a bank loan. (4 points) Advantages of Dragon 's funding  When a firm receives cash from the Dragons, the company does not have to repay the money, unlike when it receives capital in the form of a loan.  Investors are prominent individuals who have expertise about the business, and as a result, they may assist a company in breaking into the market. Disadvantages  Reduced ownership and control of your own company. Investors are entitled to percentage control over your company in exchange to the investment.  Dragon 's funding results in dilution of individual 's earning share of earnings - Investors are entitled to a share of profit for their investment. Advantages  In contrast to the cash provided by the Dragon, the lending institution or individual does not have any claim to a portion of the company's profits or shares.  In contrast to the situation with Dragon's financing, the entity that provided the loan does not exercise any influence over the day-to-day operations of the firm. Disadvantages  The ability of the borrower to provide collateral is taken into account while deciding whether or not to grant the loan. If the borrower does not have the needed collateral, they will not be able to acquire a loan for the desired amount of money.  When a person takes out a loan, they are responsible for paying the principal amount plus interest, which is an additional expense.

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8 References CBC. (2022).Zeronext - Pitches - Dragons' Den. Www.cbc.ca; www.cbc.ca.https://www.cbc.ca/dragonsden/m_pitches/zeronext

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