Question

Why do firms sometimes finance with venture capital as opposed to an IPO?

Why do firms sometimes finance with venture capital as opposed to an IPO?

Homework Answers

Answer #1
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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