In exchange for a share of ZYX's profits if it succeeds, Firm ABC provides development funds to newly formed ZYX, which is developing an innovative product. ABC funds are called , while ZYX is known as a .
A) venture capital; start-up
B) retained earnings; entrepreneurial firm
C) mutual funds; start-up
D) transfer payments; entrepreneurial firm

Question

Quizplus · Accepted Answer

Venture capital refers to providing funding to start-ups or newly formed companies in exchange for a share in their profits if they become successful. Start-up is the term used for a newly formed company, especially one with a focus on developing an innovative product or service. Therefore, option A - venture capital and start-up - is the best choice.

In Exchange for a Share of ZYX's Profits If It