1a) Venture capital is when a person asks the investor for cash to start up their business idea, in

exchange the investor asks for a share percentage.

1b) GPM = GP/R X 100

GPM = 15,000,000/ 36,000,000 X 100

GPM = 41.66%

PGM = 42%

1c) One advantage is that Zwift would be able to see the amount of finance needed as per the
financial information indicated in the business plan, therefore Zwift can see the type of source of
finance needed like external sources and internal sources , as a result Zwift can be more
effective with their time, hence Zwift can also save costs as some external sources of finance
like a bank loan charges interest for taking a loan however due to Zwift being a Ltd this would
limit Zwift of using certain external sources of finance like share capital which involves selling
shares of Zwift on the stock market.

One more advantage is that Zwift can attract more potential investors like venture capitalists as
shown in 2016, this depends on how good the business idea is, therefore Zwift would be able to
gain more finance as shown in the year 2016, Zwift had a investment from a venture capitals
with a sum of $27m, as a result Zwift will be able to be expand their cycling business into more
than 150 countries in the world which has bad weather and road conditions, this will help to
increase sales and revenue for Zwift due to Zwift charging a $10 fee every month to their
customers.

1d) One likely advantage of Zwift having limited liability is that, Zwift can have a separate legal
entity, therefore Zwift will be able to avoid any legal damages done to Jon Mayfield and Eric Min
who are the owners of Zwift , as a result Zwift can have a better brand image.

One more likely advantage is that the personal assets of Jon Mayfield and Eric Min will not be
used to pay off any debts/liabilities of Zwift, instead the capital invested by Jon Mayfield and Eric
Min will be used to pay off any debts/liabilities of Zwift, therefore on Mayfield and Eric Min will
not lose their personal assets e.g cars, houses and etc. However Zwift might still have losses as
the capital invested of $30m may not be enough to pay the full amount of debt.

1e) One likely impact is that Zwift can have a USP, this is due to Zwift enabling their customers
to have the experience of the real worlds weather in virtual reality when the customer is unable
to get out of their house, as a result Zwift would be using product differentiation and will help
Zwift to stand out in the cycling market, finally Zwift will be able to have an increase in
customers, this will increase revenue for Zwift, hence Zwift can add several additions in to the
game to make sure the success.
One more likely impact is that Zwift can have more revenue due to Zwift charging $10 fee every
month to use the game, therefore Zwift will have keep on adding new features to the game, as a
result Zwift can attract more potential customers as demand increases for Zwift’s , hence Zwift
can have a better brand image.

2a) Consumer trends are when the market is focused on one product that is very popular.

2b) GP = net profit - cost of sales