Which of the Following Statements Regarding Exit Strategies Is FALSE

question 105

Multiple Choice

Which of the following statements regarding exit strategies is FALSE?

• A) An alternative way to provide liquidity to its investors is for the company to become a publicly traded company.
• B) An important consideration for investors in private companies is their exit strategy, or how they will eventually realize the return from their investment.
• C) Often large corporations purchase successful start-up companies. In such a case, the acquiring company purchases the outstanding stock of the private company, allowing all investors to cash out.
• D) Roughly 25% of venture capital exits from 2001-2005 occurred through mergers or acquisitions.

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Definitions:

Price Fixing

A practice where competitors agree on selling prices rather than letting competition in the market determine them, often illegal.

Antitrust Policy

Regulations and laws put in place to prevent monopolies, promote competition, and protect consumers from unfair business practices.

Treatment

An intervention or set of interventions, typically in a medical or psychological context, designed to address a health problem or disorder.

Tying Contracts

Agreements where the sale of one product is conditional on the purchase of another product.