Which one of the following statements concerning venture capital is correct?
A)Venture capital is frequently provided in stages with each stage financed by a different venture capitalist.
B)Most venture capitalists are passive investors.
C)The founders of a firm generally realize substantial payoffs as soon as the firm receives venture financing.
D)Venture capitalists generally compete with banks to find projects to finance.
E)Well established firms tend to absorb most of the available venture capital.

Question

Quizplus · Accepted Answer

Venture capital is frequently provided in stages, where each stage is financed by a different venture capitalist. This is known as venture capital financing rounds, where startups receive funding from different investors in sequential rounds as they achieve specific milestones or goals. This allows the investors to mitigate their risks and ensures that the startup is making progress before receiving additional funding.

Which One of the Following Statements Concerning Venture Capital Is