Which of the Following Statements Is Generally True of Venture

question 65

Multiple Choice

Which of the following statements is generally true of venture capital (VC) firms?

• A)VCs are always silent partners in the start-up company that they finance.
• B)VCs always have a majority of directors in the start-up company.
• C)VCs generally provide management advice and contacts in addition to capital.
• D)VCs are combinations of publicly traded companies.

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Definitions:

Diffusion of Responsibility

A phenomenon in social psychology where individuals feel less compelled to take action or assume responsibility in the presence of a large group of people.

Reciprocity Norm

A social norm that dictates that people should return the favor or kindness that has been done to them.

Social Exchange Theory

A social-psychological and sociological perspective that explains social change and stability as a process of negotiated exchanges between parties.

Personal Reward

A benefit or positive outcome that an individual receives or perceives to receive after performing a particular action.