Igor needed financing for his budding business, but was rejected by many financing companies. Finally, one of his uncle's friends, a wealthy man, got interested in the business and gave Igor a substantial amount for a share in the venture. Which of the following best represents Igor's source of finance?

Question

Quizplus · Accepted Answer

Igor's source of finance is an angel investor, which is a wealthy individual who invests in a startup or small business in exchange for equity. It is different from debt financing, where the borrower has to repay the loan with interest, and from a loan shark, who is an illegal lender who charges extremely high interest rates. It is also different from an initial public offering (IPO), which is a process of offering shares to the public and listing the company on a stock exchange, and from revolving credit, which is a line of credit that allows the borrower to borrow up to a certain limit as needed and repay it over time.

Igor Needed Financing for His Budding Business, but Was Rejected