ECONOMICS
INCENTIVES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Financing provided by an individual or a company to a VC for the purposes of research, assessment and development of an initial concept or prototype, where the VC’s organisational structure has not been formalised.
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Financing provided by an individual or a company to a VC for product development and initial marketing, where the VC is in the process of formalising its organisational structure, or if its organisational structure has been formalised, the VC has not sold its products commercially.
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Capital expenditure or working capital to initiate commercialization of a technology or product.
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Additional capital expenditure or additional working capital to increase production capacity, or for marketing or product development.
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Detailed explanation-1: -Startup funding is the money a business uses to start or support a new business. There are many different types of funding. Startups use these funds to cover marketing, growth, and operating expenses to launch the business.
Detailed explanation-2: -What is Venture Capital. Definition: Start up companies with a potential to grow 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.
Detailed explanation-3: -Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. Venture capital generally comes from well-off investors, investment banks, and any other financial institutions.
Detailed explanation-4: -Venture capital makes long-term investment in highly potential ventures of technical savvy entrepreneurs whose returns may be available after a long period, say 5-10 years. 3. Venture capital does not confine to supply of equity capital but also supply of skills for fostering the growth and development of enterprises.