Which of the Following Statements Is NOT True Regarding Angel

question 8

Multiple Choice

Which of the following statements is NOT true regarding angel investors?

• A) They are typically arranged as limited partnerships.
• B) For many start-ups, the first round of outside private equity financing is often obtained from them.
• C) Because their capital investment is often large relative to the amount of capital already in place at the firm, they typically receive a sizeable equity share in the business in return for their funds.
• D) These investors are frequently friends or acquaintances of the entrepreneur.

---

Definitions:

Goods-in-bailment

Items that are temporarily entrusted to another party for care, custody, or service, without transferring ownership.

Negotiable Document

A written instrument, such as a check or bill of lading, that promises payment or delivery and can be transferred to another party.

Risk of Loss

The possibility that an asset's value could decrease due to changes in the market or other factors, affecting the holder's financial position.

Insurable Interest

A requirement that a person must stand to suffer a direct financial loss from the damage, loss, or destruction of the property or life insured.