FB is a private limited company that produces premium meat-free burgers. FB has two shareholders, Bill and Sanjay. They each own 50% of the shares. FB's burgers are produced in a factory using batch production. FB employs semi-skilled workers in the factory and promotes its burgers as being 'hand-made'. FB has been operating in country Q for three years. The demand for premium meat-free burgers in country Q has increased significantly in this period. An extract from FB's financial data over this time period is shown in Table 2.1. Table 2.1: Financial data for FB 2018 2019 2020 Gross profit ($m) 0.6 3 12 Revenue ($m) 1.8 7.2 25 Gross profit margin 33.33% 41.67% X% The brand awareness and market share of FB has also been increasing. Bill thinks this is because of effective advertising, good customer retention and an effective price strategy. However, FB's current factory is not modern enough to keep up with this increase in demand. Bill and Sanjay want to change from batch production to flow production to modernise the factory. However, this will require an external source of finance. Bill has suggested two possible sources of finance to fund this change. Source 1 – venture capital A venture capitalist has offered to buy 10% of FB for $1m. She wants to be part of the decision-making at FB. She has experience of helping businesses to grow within country Q. Source 2 - a bank loan A bank has offered to loan FB $1m at a high interest rate. The bank manager is worried that the demand for meat-free burgers may decline in the future and would require the loan to be paid back within one year.