Personal Investment and Love Money

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Questions and Answers

What does personal investment in borrowing signify to your banker?

  • You have extra money to spare
  • You have a long-term commitment to your project (correct)
  • You are not serious about the loan
  • You are a high-risk borrower

What is 'love money' in the context of borrowing?

  • Money borrowed from strangers
  • Grants from the government
  • Funds loaned by family or friends (correct)
  • Capital invested by venture capitalists

What type of businesses are venture capitalists typically interested in funding?

  • Small local businesses
  • Technology-driven businesses with high-growth potential (correct)
  • Non-profit organizations
  • Businesses with low growth potential

What is one expectation that venture capitalists have when investing in a business?

<p>A healthy return on their investment (A)</p> Signup and view all the answers

Why is it important to choose venture capital investors who bring relevant experience to your business?

<p>To ensure informed guidance and support (C)</p> Signup and view all the answers

What is the key difference between personal investment and venture capital funding?

<p>Personal investment involves giving up ownership, unlike venture capital funding (B)</p> Signup and view all the answers

What distinguishes crowdfunding from traditional fundraising through angel investors or venture capitalists?

<p>Crowdfunding involves asking the public for small contributions in exchange for equity, while angel investors and venture capitalists provide larger sums of money with equity stakes. (B)</p> Signup and view all the answers

What is a key role that institutional venture capitalists play when investing in companies?

<p>Serving on the board of directors and ensuring transparency in management practices (B)</p> Signup and view all the answers

How do angels typically finance businesses according to the text?

<p>Their investments range from $25,000 to $100,000 in the early stages of a business (B)</p> Signup and view all the answers

What is the primary objective of crowdfunding?

<p>To solicit small contributions from the public in exchange for equity (A)</p> Signup and view all the answers

Where can entrepreneurs usually find angels for potential investments?

<p>Through specialized associations or websites dedicated to angels (A)</p> Signup and view all the answers

What differentiates debt crowdfunding from equity crowdfunding?

<p>Debt crowdfunding spreads a large amount of money in small increments across many loans, while equity crowdfunding seeks donations for rewards. (B)</p> Signup and view all the answers

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