A venture capitalist usually will invest in a small business by one of several methods. Which of the following is not one of those methods.
A) Taking a direct ownership position in the form of common stock
B) Purchasing the business
C) Accepting the firm's bond plus an "equity kicker"
D) Taking the right to purchase a certain portion of the firm

Question

Quizplus · Accepted Answer

Purchasing the business is not a typical method of venture capitalist investment. Venture capitalists typically seek to invest in a business to help it grow and eventually make a profit, not to purchase and own the entire business. The other methods listed (taking a direct ownership position, accepting a firm's bond with an "equity kicker," and taking the right to purchase a certain portion of the firm) are all common methods of investment for venture capitalists.

A Venture Capitalist Usually Will Invest in a Small Business