What Exit Strategy Allows the Entrepreneur an Opportunity to Purchase

question 72

Multiple Choice

What exit strategy allows the entrepreneur an opportunity to purchase back venture capital stock at cost and an additional premium?

• A)IPO
• B)exit clause
• C)buyback
• D)retract clause

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Definitions:

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence, typically reflected by owning 20%-50% of voting stock.

Acquisition Method

A set of procedures used in accounting to consolidate the financial statements of a parent company and its subsidiaries.

Consolidated Revenues

The total earnings generated by a company and its subsidiaries, reported together as a single figure.

Partial Equity Method

The partial equity method is an accounting approach used when an investing company has significant influence, but not full control, over an investee, recognizing income to the extent dividends are received.