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Venture Capitalists Expect Lower Than Average Returns on Their Investment

question 257

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Venture capitalists expect lower than average returns on their investment since they are exposed to little risk.


Definitions:

Leasing

A financial arrangement wherein a person or company uses equipment, vehicles, or property for a specified period in exchange for regular payments to the owner.

Buying

The act of acquiring ownership or rights to a service or asset in exchange for money or value.

Net Present Value (NPV)

The difference between an investment’s market value and its cost.

After-Tax Borrowing Rate

The interest rate on borrowed funds after accounting for the effect of income taxes.

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