Dplanning research

$64.$ Daisy Taylor has developed a viable new business idea. Her idea is to design and manufacture cookware that remains cool to the touch when in use. She has had several family members and friends try out her prototype cookware, and they have consistently given the cookware rave reviews. With this encouragement, Daisy started giving serious thought to starting up a business called "Cool Touch Cookware" $($CTC$).$

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Daisy understands that it will take a few years for the business to become profitable. She would like to grow her business and perhaps at some point $"$go public" or sell the business to a large retailer.

Daisy, who is single, decided to quit her full$-$time job so that she could focus all of her efforts on the new business. Daisy had some savings to support her for a while, but she did not have any other source of income. She was able to recruit Kesha and Aryan to join her as initial equity investors in CTC$.$ Kesha has an MBA and a law degree. She was employed as a business consultant when she decided to leave that job to work with Daisy and Aryan. Aryan owns a very profitable used car business. Because buying and selling used cars takes all his time, he is interested in becoming only a passive investor in CTC$.$ He wanted to get in on the ground floor because he really likes the product and believes CTC will be wildly successful. While CTC originally has three investors, Daisy and Kesha have plans to grow the business and seek more owners and capital in the future.

The three owners agreed that Daisy would contribute land and cash for a $30$ percent interest in CTC$,$ Kesha would contribute services $($legal and business advisory$)$ for the first two years for a $30$ percent interest, and Aryan would contribute cash for a $40$ percent interest. The plan called for Daisy and Kesha to be actively involved in managing the business, while Aryan would not be$.$ The three equity owners' contributions are summarized as follows: