Venture Capital

Exercise

1. Which of the following statements regarding venture capital is correct?
   
   1. Venture capitalists are selective in their investments because each investment must turn a profit.
   2. Most venture capital investments are done with pooled investment vehicles.
   3. When a VC firm invests, they generally take a hands off approach regarding the firm's management.
   4. All of these answers.
   
   
2. Which of the following is an advantage for a firm seeking VC financing?
   
   1. The company retains autonomy.
   2. VC funding offers companies an opportunity to expand that is not possible with other methods.
   3. The accounting and legal fees associated with the funding are not shouldered by the firm.
   4. D) All of these answers.
      
      
3. Which of the following is NOT a benefit associated with a company initiating an Initial Public Offering (IPO)?
   
   1. The company will be able to increase its exposure, prestige, and public image.
   2. The company is guaranteed to raise additional capital necessary to expand its business.
   3. The company will be able to attract and retain better management and employees.
   4. The company will have cheaper access to capital.