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:

Negative Earnings Surprise

An event where a company's reported earnings are below the expectations of analysts, often leading to a decline in its stock price.

Stock Returns

The income generated from the investment in shares, comprised of dividends received and capital gains or losses.

Exit Price Approach

A valuation method that determines the price a seller would receive to sell an asset or transferred liability.

Transaction Costs

The expenses associated with buying or selling goods, services, or financial instruments, which may include commissions, fees, and bid-ask spreads.