Overview
Rasheeda has designed software for use in microfinance. (Microfinance is the making of small working capital loans to low-income individuals.) Her business is a sole proprietorship and has poor cash flow. Rasheeda doesn’t have much experience in marketing software. Based on her conversations with others, Rasheeda believes that she can interest as many as 10 people and businesses around the world to invest in her company. Rasheeda also hopes to take the company public one day in an IPO (initial public offering). Rasheeda is afraid that, if she sells an ownership interest or interests in the business, people who are more concerned with the bottom line, rather than with the quality of the company’s loans, will control her business, and ultimately adversely affect its long-term viability.
Rasheeda is also concerned that employees will sell or use her list of borrowers. What type of business should Rasheeda form? How can she protect herself from current and former employees selling or using her list of borrowers?