Question

which of the following is true of venture capital?
strong potential for growth and a solid business plan are two measures that venture capitalists use to evaluate potential investments.
venture capitalists are rarely interested in company operations once an investment is made.
venture capitalists seek to generate a return on their investment in less than a year.
venture capital is typically sought by new companies that have low upfront costs.

Explanation:

• Analyze each option:
• First option: Venture capitalists evaluate potential investments using growth potential and business plans, which is accurate.
• Second option: Venture capitalists often monitor company operations post - investment, so this is false.
• Third option: Venture capital investments typically have a longer time horizon (not less than a year) for returns, so this is false.
• Fourth option: Venture capital is usually sought by new companies with high growth potential (not low upfront costs), so this is false.

Answer:

A. Strong potential for growth and a solid business plan are two measures that venture capitalists use to evaluate potential investments.