Which of the Following Statements About Venture Capital Funding Is

question 5

Multiple Choice

Which of the following statements about venture capital funding is not correct?

• A) Exiting an investment can occur through an initial public offering or by merger or acquisition.
• B) Venture capital investing is highly risky.
• C) Venture capital firms may focus on a limited geographic area or on specific industries to facilitate monitoring their investments.
• D) Firms hope to exit a start-up firm in 3-5 years.

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Definitions:

Interest

The cost of borrowing money or the payment received for lending money, usually expressed as an annual percentage of the principal amount.

Simple Interest

A way of calculating interest where the interest charge is based on the original principal only and does not compound.

Repaid

The action of paying back borrowed money to a lender, either in installments or as a lump sum.

Loans

Sums of money borrowed that are expected to be paid back with interest, often under agreed-upon terms between lenders and borrowers.