An engineer with a major power company decides to leave his job because he believes he has found a way to deliver Internet service across the electrical grid and he wants to start up his own business. He doesn't have very much cash or collateral
Which method of financing do you believe he will most likely use and why?
Venture capital is his most likely source. The reason is that bank financing is not likely to work because the bank will perceive the venture as being too risky. Also, since he doesn't have any collateral this would be another reason that the loan would not likely be approved. The venture capitalist is still taking on the same risk but is able to spread that risk over a diversified portfolio of different projects.
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The price a perfectly competitive firm receives for its output
A) is determined by the interaction of all sellers and all buyers in the firm's market. B) is determined by the interaction of the firm and all of the consumers who buy from the firm. C) will be lowered by the firm in order to sell more output. D) will not change in response to changes in market demand and supply because the firm is a price taker.
Which of the following is most likely to be common property?
A) lawn in a privately owned golf club B) farm raised catfish in Alabama C) tuna in the Pacific Ocean D) cattle in a Texas ranch