Which of the following statements about startup capital is false?

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Which of the following statements are false ? Indicate the correct code.(a) Share capital issued by a company for the first time is known as venture capital.(b) All Venture Capital Funds in India are promoted by the Government.(c) In addition to capital, venture capitalists provide managerial and technical support also to the assisted firms.(d) Benefits from venture capital financing can be realised in long run only.

  1. (a), (b) and (d)
  2. (a) and (b)
  3. (b), (c) and (d)
  4. (c) and (d)

Answer (Detailed Solution Below)

Option 2 : (a) and (b)

Free

Teaching Aptitude Mock Test

10 Questions 20 Marks 12 Mins

Venture Capital:

Which of the following statements about startup capital is false?

a) Venture capital (VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth (in terms of the number of employees, annual revenue, the scale of operations, etc.). Venture capital firms or funds invest in these early-stage companies in exchange for equity, or an ownership stake. Venture capitalists take on the risk of financing risky start-ups in the hopes that some of the firms they support will become successful.

b) Venture Capital typically comes from institutional investors and high net worth individuals and is pooled together by dedicated investment firms. It is the money provided by an outside investor to finance a new, growing, or troubled business. 

c) Venture capitalist finances innovation and ideas, which have the potential for high growth but are unproven. This makes it a high risk, high return investment. In addition to finance, venture capitalists also provide value-added services and business and managerial support for realizing the venture’s net potential.

d) Start-up companies with the potential to grow to need a certain amount of investment. Wealthy investors like to invest their capital in such businesses with a long-term growth perspective. This capital is known as venture capital and the investors are called venture capitalists. Venture capital financing is a long term investment. It generally takes a long period to encash the investment in securities made by the venture capitalists.

Thus, options A and B are False.

Last updated on Oct 19, 2022

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What is startup capital everfi?

Spending Plan - The budget that helps you figure out how to spend wisely and save for future goals. Startup Capital - Money you invest into your business to get it up and running. Starting a business can be expensive. Start saving by creating a spending plan.

What is true startup capital?

Startup capital is what entrepreneurs use to pay for any or all of the required expenses involved in creating a new business. This includes paying for the initial hires, obtaining office space, permits, licenses, inventory, research and market testing, product manufacturing, marketing, or any other operational expense.

What is one way to begin saving start up capital?

One way to begin saving startup capital is to set aside a portion of your income each month. Startup capital is the money you invest in the form of supplies, marketing, legal services, and other investments to get your business up and running.

What is considered a balanced budget everfi?

When is a budget considered to be balanced? When the amount you earn is equal or less than to the amount you spend.