Which of these options are correct about the potential sources of equity financing for non-listed companies? (Select all that apply) A) Venture capital commonly involves taking a c... Which of these options are correct about the potential sources of equity financing for non-listed companies? (Select all that apply) A) Venture capital commonly involves taking a controlling stake in the company B) Growth capital involves financing relatively mature companies. C) Leveraged management buyouts (LBOs) commonly involve taking a controlling stake in the company D) Venture capital commonly involves taking a minority stake in the company.
Understand the Problem
The question is asking about the correct statements related to potential sources of equity financing specifically for non-listed companies, providing multiple options to select from.
Answer
B, C, and D are correct.
Correct options are: B) Growth capital involves financing relatively mature companies, C) Leveraged management buyouts (LBOs) commonly involve taking a controlling stake in the company, and D) Venture capital commonly involves taking a minority stake in the company.
Answer for screen readers
Correct options are: B) Growth capital involves financing relatively mature companies, C) Leveraged management buyouts (LBOs) commonly involve taking a controlling stake in the company, and D) Venture capital commonly involves taking a minority stake in the company.
More Information
Venture capital usually takes a minority stake, focusing on early-stage companies. Growth capital targets mature businesses for further expansion. Leveraged buyouts typically involve acquiring a controlling interest using significant amounts of borrowed money.
Tips
A common mistake is assuming venture capitalists take controlling stakes. They often prefer minority stakes to support multiple startups while maintaining strategic influence.
Sources
- Private Equity Explained With Examples and Ways to Invest - investopedia.com
- Private Equity vs. Venture Capital | What is the Difference? - wallstreetprep.com
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