Investor Presentaiton

16 B. Establishment of a New Wholly Owned Business Under this model, Investor starts a new US company as a wholly-owned subsidiary. Investor begins operations from nothing and grows using its own efforts. Pros Good model if the foreign company has a popular brand name and a unique business model or operation (e.g., McDonald's) that it wants to pursue without interference from other parties. Also good if it has the right people with the right experience to lead that operation and wants to avoid acquiring problems of an existing company. Cons ■Requires self-sufficient financial resources, a commitment to learn new market on its own, the ability to hire good local managers, and patience for business to grow. ■The Investor must learn, on its own, how to operate using a foreign language in a foreign culture. C. Joint Ownership There are two main types: Investor acquires equity in an existing US company. Investor and existing US company form a new jointly-owned company. Pros I Investor can begin in the US with a strategic US partner who knows the US business practices for the industry. IUS partner may be able to share ex- penses and risks with Investor and offer capabilities that complement those of Investor. Cons Investor must share management and revenue with the US company and is at risk if US company pursues interests separate from Investor's interests. ■If Investor wants to grow and become independent, Investor will need to buy out the US company. Garvey Schubert Barer ▲ gsblaw.com

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