Match each type of financing with a potential source of money.

A. Debt financing

Private bank

B. Venture capital

Wealthy individual

C. Angel investment

Bond issue

D. Business loan

Group of investors

The correct answer is:

A. Debt financing - Bond issue

B. Venture capital - Group of investors

C. Angel investment - Wealthy individual

D. Business loan - Private Bank

• Bonds are financial debt instruments used by both private entities and government entities. The bond is one of the ways to materialize debt securities, fixed or variable income. They can be issued by a public institution (a State, a regional government or a municipality) or by a private institution (industrial, commercial or service company).

• Venture capital consists of financing start-ups in the growth phase with high potential and risk. Venture capital funds benefit from this type of operations by becoming the owners of the assets of the companies in which they invest, which are usually companies that have a new technology or a new business model within a technological sector, such as biotechnology, ICT, software, etc.

• An angel investor, also called godfather investor or proximity investor, is a prosperous individual who provides capital to a start-up or emerging company, usually in exchange for a shareholding. In addition to financial capital, they contribute their business or professional knowledge suitable for the development of the society in which they invest.

• A loan is an operation by which a financial institution makes available a certain amount of money through a contract. In a loan, the obligation to return that money within a set period of time and to pay agreed commissions and interests is acquired.

A. Debt financing - Bond issue

B. Venture capital - Group of investors

C. Angel investment - Wealthy individual

D. Business loan - Private Bank

Debt financing is usually done through floating of bonds whereas venture capital comes from a group of investors looking for high returns. Loans are provided by banks