Question

which of the following is true of venture capital?

• on average, venture capital investors seek a return on their investment in about five years.
• venture capital is comparable to a bank loan, which must be repaid over time.
• venture capitalists typically sell their portion of company res before an ipo or the sale of the company.
• e way venture capitalists evaluate potential estments is by analyzing a companys share price.

Explanation:

• Analyze each option:
• Option 1: Venture capital investors typically aim for a return in around 5 - 7 years, so "about five years" is reasonable.
• Option 2: Venture capital is equity financing, not a loan (no repayment obligation like a bank loan), so this is false.
• Option 3: Venture capitalists usually exit (sell shares) during IPO or company sale, not before, so false.
• Option 4: Venture - backed companies are often private (no share price), so analyzing share price is not a way they evaluate, false.

Answer:

A. On average, venture capital investors seek a return on their investment in about five years.