Which of the following is a reason why an investor would choose to invest in new and growing firms as a limited partner in a venture capital firm rather than making those investments directly by themselves?

Question

Quizplus · Accepted Answer

Investing in new and growing firms as a limited partner in a venture capital firm allows the investor to benefit from the control and protection provided by the venture capital firm. Venture capital firms typically have a greater level of control over the companies they invest in and are more experienced in managing the risks associated with investing in early-stage companies. Thus, they can provide greater protection and support for the investor's capital than the investor could achieve on their own.

Which of the Following Is a Reason Why an Investor