Question

Tactics that venture capitalists use to reduce the risk of their investment include:

Select one:

A. funding the ventures in stages, requiring entrepreneurs to make no personal investments, syndicating investments, and maintaining in-depth knowledge about the industry in which they specialise.

B. funding the ventures completely in the beginning, requiring entrepreneurs to make personal investments, syndicating investments, and maintaining in-depth knowledge about the industry in which they specialise.

C. funding the ventures in stages, requiring entrepreneurs to make personal investments, syndicating investments, and maintaining in-depth knowledge about the industry in which they specialise.

D. None of the above.

Answer 1

C. Venture Capitalists are the form of private equity investors which make investment in the smaller scale and in the small scale industries and small level of business.

funding for an idea/business will be made in stages once after all the ground work is completed by the team of VCs having a keen knowledge in the respective industry. Vcs will get holding in the business based on the investments made by VCs. based on the analysis investements would be made proportionally by the entrepreneurs, VCs and syndicated the rest by the banks.