Which of the Following Is NOT True with Respect to Venture

question 1

Multiple Choice

Which of the following is NOT true with respect to venture capital (VC) funds?

• A)When a VC fund decides to invest in a business, it will set out clear requirements that the business must meet to receive the funding.
• B)A VC fund commonly sells its equity stake in a firm to the public before the firm engages in an IPO.
• C)VC funds receive money from wealthy investors and pension funds that are willing to maintain the investment for a long-term period.
• D)All of these are true with respect to VC funds.

---

Definitions:

Maturity Value

The amount that will be paid to the holder of a financial instrument at its maturity date.

Bought Deals

An arrangement in which an investment bank buys an entire new issue of securities from a company and resells it to investors.

Underwriters

Entities or individuals that evaluate and assume the risk associated with financial transactions, often seen in insurance and investment banking.

Treasury Stock

Shares that were once part of the outstanding shares and have been bought back by the issuing company, reducing the amount of outstanding stock on the market.