please answer 2nd question only and with full explanation plz

, 1 QUICKSNAP: THE EVER-CHANGING OWNERSHIP STRUCTURE When David Reynolds of Halifax, Nova Scotia, started university, he had no idea what he wanted to do with his life. Reynolds says. "I went to university with no real plan or ambition to do anything. I went to universty because it's what all my friends were doing." A short time after enroling at Mount Saint Vincent University, Reynolds attended a lecture on entrepreneurship, and, as part of a class assignment, he had to create and run a small business for a day. Reynolds immediately fell in love with the concept of entre preneurship. He notes, loved the thought of being my own boss. I was always inventing little things, but it never really occurred to me that I could create a company from one of my ideas. That class lecture and the small assignment showed me I could Reynolds then knew he wanted to be an entrepreneur but did not have a business idea. A short time later while waiting Impatiently for his friend to tie nis shoes, Reynolds had a light bulb moment. He states, "People hate tying their shoes. What if they didn't have to do this? What if there was a way to clip the laces together?" A short time later QuickSnap, a shoe fastening device, was born. When the company first started. It was structured as a sole proprietorship: as Reynolds quips, it was just me and my idea." Reynolds says the advantage of being a sole proprietor allowed him to work when he wanted to work, an impor tant aspect as he was a full-time student. Reynolds soon realized that starting a company, especially a manufacturing business, was a lot of work, and he brought in his friend and his brother as partners. The partners brought in some additional capital and, more importantly, some extra help in getting the business off the ground. Together they shared the work and combined their strengths. Reynolds says that forming a partnership was cheaper and easier than forming a corporation: "We drafted a partner ship agreement, we all signed it and we became partners. Together the three managed to bring the product to market, albeit in o smal way, in local sporting goods stores Reynolds felt that the business needed some additional marketing dollars and soon started pursuing outside investors. He pitched his business ideas to a variety of banks and traditional lenders and managed to sell his concept to fellow student Riad Byne, who was attending Mount Saint Vincent University after completing military duty in Afghanistan Reynolds notes, "At this ume, I knew that we needed a formal structure, and the business went through the process of incorporating. We needed the advantages of a private corporation, we needed to be able to issue shares to investors, ensure that everyone involved in the ownership group had limited liability, and so forth The business partners eventually brought their idea to the mainstream media, pitching the product on CBC's Dragons Den where they successfully brokered a deal for 5125,000 investment in return for 50 percent ownership in the company. While Reynolds is no longer the CEO, something he attributes to giving up too much ownership control too early to outside investors. he does say he has done well on his investment in the business and is pleased to report that Quicksnap landed several large deals after Dragons Der Including Walmart and Sport Chek, Discussion Questions 1. Based on the information in the case, what are some of the advantages and disadvantages of the three major forms of busi- ness sole proprietorship, partnership, and corporation? 2. What do you think are some of the potential markets for QuickSnap? How would you promote the product? 3. Were you surprised to learn the entrepreneurs agreed to give up 50 percent ownership of their business for $125,0007 Wriy or why not? 4. Would you have sold off shares in your business like Reynolds, who was trying to grow his business quickly, or would you prefer the slow-growth method where you maintain 100 percent ownership of your comparty? Why? . 18 . fin ST PO