Question

Venture capitalists are always looking for viable business to invest in. In reviewing all the issues affecting profitability and realization of return, which of the following issues would be the most important?

Select one:

a. Exit plan

b. Professional background of the management team

c. Key staff are “locked in” with non-computer algorithms

d. Rate of “cash burn”

Answer 1

selection of the exit plan is very important for any venture capitalist because he would always be looking to realise his value of asset by selling on to other investors.he would look for the viable option at the time of investment as he do not want to lose on his value of Investments and he also wants ample liquidity to offload his investment.

rest of the options are not that important as rate of cash burn or key staffs or professional background are minute issues but exit plan is the most important issue for a venture capitalist.

Hence correct option is option ( A).