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Which one of the following statements concerning venture capital is correct? a. The financial status of...

Which one of the following statements concerning venture capital is correct?

a.

The financial status of a venture capitalist is an important consideration when seeking funding.

b.

Venture capitalists rarely, if ever, get involved with the daily operations of a firm.

c.

Venture capital is relatively easy to obtain for most new firms.

d.

Venture capitalists tend to be long-term investors in a firm.

e.

Venture capitalists tend to be generalists who become involved with diverse industries.

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Answer #1

Answer: e

This is the capital funding in projects which are new and therefore, having substantial amount of risk. In order to dilute such risk, venture capitalists make their investment in diverse industries – loss on one investment could be recovered through other investments; this could only be possible if industries are different.

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