Miracle Fund is a venture capitalist. In exchange for providing venture capital, Miracle Fund
A) expects the entrepreneur to pay interest to the fund.
B) receives the right to own a percentage of the entrepreneur's business.
C) takes a percentage of the annual earnings.
D) becomes a general partner of the entrepreneur.

Question

Quizplus · Accepted Answer

As a venture capitalist, Miracle Fund invests in potential startup businesses in return for an ownership stake in the business. They take on the risk of the investment and hope for a good return on investment (ROI), usually in the form of a percentage of the business's profits or an increase in the value of their ownership stake. Unlike a loan, venture capitalists do not typically expect the entrepreneur to pay interest or take a percentage of the earnings. Instead, they aim to support the growth of the business and help it succeed. Therefore, choice B is the best answer as it describes what is typically expected in a venture capitalist-entrepreneur relationship.

Miracle Fund Is a Venture Capitalist