Pfeffer Pharmaceuticals Inc. wishes to raise a substantial amount of capital to grow the business. The board decides to seek the services of a professional group of investors who will temporarily exercise a substantial amount of control over the board to use their expertise to grow the corporation. However, since this control is meant to be temporary, they must have an "exit strategy." What type of services is Pfeffer Pharmaceutical seeking?

Question

Quizplus · Accepted Answer

Venture Capital Firms often provide capital to companies in exchange for equity and a degree of control over the company's decisions, with the understanding that they will exit the investment once the company has grown sufficiently.