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      Question

      Startup 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 ____ 
      A Share Capital Correct Answer Incorrect Answer
      B Authorized Capital Correct Answer Incorrect Answer
      C Preference Capital Correct Answer Incorrect Answer
      D Venture Capital Correct Answer Incorrect Answer
      E Paid up capital Correct Answer Incorrect Answer

      Solution

      Startup 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.   Such investments are risky as they are illiquid, but are capable of giving impressive returns if invested in the right venture. The returns to the venture capitalists depend upon the growth of the company. Venture capitalists have the power to influence major decisions of the companies they are investing in as it is their money at stake    

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