Question

31) Most individuals have little opportunity to invest in venture capital funds because this investment segment of the capital markets is restricted to “accredited investors”. True or False?

32) Entrepreneurs must be very cautious about using the resources of another company to build the ideas and intellectual property of their future venture. If a venture capitalist does not trust that the founder owns the intellectual property behind the venture, they will be unlikely to invest in the venture. True or False?

33) Investors who bought the series D convertible preferred stock issued by Zoom in 2016 and then sold the shares in the IPO earned an annual rate of return of between 105% and 110%. (assume the purchase was on January 1^st, 2016 and the sale was on December 31^st, 2019).

	time	$$cashflow
2016	0	-3.74
2017	1	0
2018	2	0
2019	3	34.2

True or False?

Answer 1

31)True. Venture capital investment can be made by instituitional investors or high net worth individuals. In the past,venture capital investments were only accessible to professional venture capitalist,although now accredited investors have a greater ability to take part in venture capitalist investments. So, individuals in this segment have less opportunity to make investment.

32) True. Trustworthiness becomes an integral part of the agreement between an entrepreneur and a venture capitalist. If a venture capitalist does not trust the owner of a company he/she may unlikely invest in that comapany.

33) False