Business Aid is funded by a group of wealthy investors for the sole purpose of providing funding for individuals and small firms that are trying to convert their new ideas into viable products. What is this type of funding called?

Question

Business

Jaslene Vance

15 April, 18:53

Business Aid is funded by a group of wealthy investors for the sole purpose of providing funding for individuals and small firms that are trying to convert their new ideas into viable products. What is this type of funding called?

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Answers (1)

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Javon Alvarado · Answer 1

Venture Capital

Explanation:

It is the capital that investors provide to startup companies, which have long term growth potential. Mostly rich investors, investment banks and other financial institutions are interested in investing in startups and small businesses. Investment can also be in the form of technology. Although it is risky to invest in small businesses the average returns are attractive. Venture capitalism is becoming a popular form of raising capital for those companies who do not have access to the capital markets. The downside of venture capital is that the investors get equity in company decisions.