What type of funding is provided by large investors to finance new products with a high probability of success?

Become proficient in Business Foundations for the WebXam. Dive deep into multiple choice questions, with hints and explanations. Prepare effectively for your exam!

Venture capital represents a type of funding that is specifically provided by large investors or firms to support startups and businesses, particularly those that are in the early stages of development and have a high potential for growth. The goal of venture capitalists is to invest in companies that have demonstrated a reliable business model and are likely to yield significant returns on investment. This funding is generally accompanied by active involvement, such as mentorship or management support, to help guide the ventures toward success.

Venture capital is often contrasted with other forms of funding like angel investment, which typically involves individual investors providing smaller amounts for equity, or crowdfunding, where funds are raised from a large number of people, usually via the internet and in exchange for rewards or equity. Public funding usually comes from governmental resources aimed at promoting innovation or supporting small businesses, but it doesn't typically involve large private investors looking for high returns. The key aspect of venture capital is its focus on high-potential businesses backed by large investments and strategic assistance, making it the most fitting choice for this question.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy