Page 240 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Unit 16: Venture Capital

Turnarounds: Such form of venture capital financing involves medium to high risk and a time Notes
scale of three to five years.

16.8 Self Assessment

Fill in the blanks:
1. TDICI was incorporated in January 1988 with the support of the ..................... and the
...................

2. Venture capital firms finance both early and later stage investments to maintain a balance
between ..................... and ......................
3. For the VC industry, the new end-use restrictions are particularly harmful as funds raised
via ..................... shares cannot be used for general corporate purposes.
4. One aspect of financing is to provide funds for the purchase of ........................ shares of
owners.

5. Venture Capital Institutions (VCIs) provide larger funds during ........................ financing.
6. ..................... refers to the financing of an enterprise which has overcome the highly risky
stage and have recorded profits but cannot go public.

7. The ..................... was formed as the first venture organization.
8. It is the venture capitalist's extraordinary skill and ability to ..................... and .....................
enormous risks and extort from them tremendous returns.

9. Venture capital is a form of equity financing especially designed for funding high
..................... and high ..................... projects.
10. Venture capital companies provide the necessary risk capital to the ..................... so as to
meet the promoters' contribution as required by the financial institutions.
11. Venture capital financing is a ..................... investment.
12. Venture capital combines the qualities of ....................., ..................... and entrepreneur in
one.
13. A venture capital is not subject to ..................... on demand.
14. Venture capitalists perceive low risk in ventures requiring finance for ..................... purposes.

15. In ..................... venture capital institutions provide funds to enable the current operating
management/investors to acquire an existing product line/business.

16.9 Review Questions

1. What is the basis of lending venture capital? Are internet/technology companies given
first priority for funding these days?
2. Is it true that most investors are ready and willing to invest and fund quickly? If not,
explain with reasons.
3. Who is an angel? How does angel investing differ from venture capital?
4. In the past year, what has been the most interesting IPO or acquisition in the industry you
want to enter?

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