Why do firms sometimes finance with venture capital as opposed to an IPO?
When companies need additional capital to grow and | ||||||
they cannot turn to the banking sector for financing, | ||||||
companies turn towards venture capital firms. | ||||||
Since banks or investment banks are not willing to take on | ||||||
the risk associated with the venture, startup companies have | ||||||
to turn to venture capital firms. Venture capital firms are willing | ||||||
to take on more risk that is associated with a startup company | ||||||
that has a new business idea. |
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