GMAT Critical Reasoning

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Source: GWD

Level: 3

A survey of entrepreneurs who started companies last year shows that while virtually all did substantial preparatory research and planning, only half used that work to produce a formal business plan. Since, on average, the entrepreneurs without formal plans secured the capital they needed in half the time of those with plans, these survey results indicate that, in general, formal plans did not help the entrepreneurs who produced them to secure the capital they needed.

Which of the following, if true, most seriously weakens the argument?

  • A Companies started by entrepreneurs who had used formal business plans to attract investment were on the whole as profitable in their first year as were companies started by entrepreneurs who had not produced such plans.
  • B In surveys of entrepreneurs who have attempted without success to raise sufficient capital, more than half of the respondents indicate that they have produced a formal business plan.
  • C Among the entrepreneurs surveyed, those who did not produce formal business plans sought and received a much larger proportion of their capital from investors with whom they had a long-standing business relationship.
  • D The entrepreneurs surveyed who did not produce a formal business plan spent nearly as much time doing preparatory research and planning as the entrepreneurs who produced plans.
  • E The entrepreneurs who produced business plans generally reported later that the process of writing the plan had increased their confidence that their company would succeed.

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