Which of the Following Is Not True Regarding Venture Capital

question 74

Multiple Choice

Which of the following is not true regarding venture capital firms?

• A) They are generally long-term investors.
• B) They generally concentrate on one particular industry.
• C) They usually insist on substantial control of the corporation being funded through membership on its board or through appointments to certain officer positions.
• D) They are generally a source of expertise in operations and expansion of the corporation being funded.

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Definitions:

IRR

The rate of return at which the sum of the present value of all cash inflows and outflows from an investment or project is zero.

MIRR

Modified Internal Rate of Return; a financial measure used to evaluate the attractiveness of investments, taking into account different financing costs and reinvestment rates.

Mutually Exclusive

Situations or events that cannot occur at the same time, indicating a choice must be made between them.

Required Rate of Return

Rephrased: The minimum percentage of profit or interest an investor expects from an investment to consider it worthwhile, factoring in the risk involved.