Strategies to Conducting Start-Up Business with Personal and Professional Integrity
The purpose of this assignment is to explain core concepts related to corporate valuation and governance and to identify strategies for conducting business with personal and professional integrity.
Read the Chapter 13 Mini Case in Financial Management: Theory and Practice. Complete Parts 1 and 2.
Part 1: Using complete sentences and academic vocabulary, please answer questions A through d.
Part 2: Using the mini case information, write a 250-500-word letter of intent discussing specific strategies for how you will conduct your start-up business with personal and professional integrity.
While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.
This assignment uses a rubric. Please review the rubric before beginning the assignment to become familiar with the expectations for successful completion.
You are required to submit this assignment to LopesWrite. A link to the LopesWrite technical support articles is located in Class Resources if you need assistance.
Mini case file:
Mini Case
Suppose you decide (as did Steve Jobs and Mark Zuckerberg) to start a company. Your product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video recorders, and cell phones. Your initial market is the student body at your university. Once you have established your company and set up procedures for operating it, you plan to expand to other colleges in the area and eventually to go nationwide. At some point, hopefully sooner rather than later, you plan to go public with an IPO and then to buy a yacht and take off for the South Pacific to indulge in your passion for underwater photography. With these issues in mind, you need to answer for yourself, and potential investors, the following questions.
Please answer those Questions. then summarizes them into 250 or 500 words.
What is an agency relationship? When you first begin operations, assuming you are the only employee and only your money is invested in the business, would any agency conflicts exist? Explain your answer.
If you expanded and hired additional people to help you, might that give rise to agency problems?
Suppose you need additional capital to expand, and you sell some stock to outside investors. If you maintain enough stock to control the company, what type of agency conflict might occur?
Suppose your company raises funds from outside lenders. What type of agency costs might occur? How might lenders mitigate the agency costs?
Benchmark
Name of the Student
Institution Affiliation
Course Name
Professor’s Name
Date
Benchmark
Part 1
Question a
An agency relationship is a situation in which one person, the principal, assigns decision-making authority to another, the agent, to act on their behalf (Gehring & Urbanski, 2023). An agency relationship may arise when a company is founded, and its founder (the principal) appoints managers or workers (the agents) to do company duties. Since decision-making is centralized in the early phases, there might not be severe agency conflicts when the creator is the only investor and employee.
Question b
Agency concerns become more likely as a company grows and hires more people. The possible conflict of interest between the founder and the recently hired staff is the cause of this increased risk. Even though the firm's success may be the founder's main priority, workers occasionally follow personal interests that deviate from the main aims of the organization (Najaf & Najaf, 2021). This misalignment of interests fosters disputes that, if not handled appropriately, may jeopardize the integrity of corporate operations. As the firm expands, managing these agency problems becomes increasingly important to ensure a coherent and principled