CH 6 the bilkul ni aate wale

Question 1

Seed capital finance

Answer 1

• capital needed at the pre commercialization stage
• entrepreneur might have a prototype that isnt fully tested/ developed.
• risk element is very high
• entrepreneurs abilities should match up with the market oppurtunities in order to persuade venture capitalists to invest in the products idea

Question 2

Prestartup startup capital

Answer 2

• business plan is presented by the entrepreneur
• prototype is developed and fully tested
• if company has BOD a member of the VC firm takes seat in it
• clients are sttracted to inital sales

Question 3

second round financing

Answer 3

• idea has been transformed into a product
• first encounter wth rest of the market
• attempt to get market share from the competitors
• assistance is need from VCapitalists to expand, grow, diversify so that economies of scale and diversity could be attained

Question 4

Last stage financing give its other names and explain

Answer 4

pre public stage / bridge financing

main goal of this stage is for the venture to go public so that the investors can exit peacefully with a profit commensurate with the risk they had take

venture has some amount of market share at his stage which can help it in

• merging with other company
• keeping competitors away
• eliminating competitors

Question 5

Features of venture capital

Answer 5

• invest in early stage comanies
• logn term investment usually for a period of 3 to 7 years
• private equity capital finance
• also provide business skills to the investee firms
• have a continuous involvemet in business even after makign the investment