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KATRIN_1 [288]
4 years ago
15

Venture capital (VC) firms are pools of private capital that typically invest in small, fast-growing companies that can't raise

funds through other means. In exchange for this financing, VCs receive a share of a company's equity, and the founders of the firm typically stay on and continue to manage the company. A VC firm wants management to focus on improving , while the managers may also act to increase . VC investments have two typical components:_______.
(1) managers maintain some ownership in the company and often earn additional equity if the company performs well;


(2) VCs demand seats on the company's board. Management ownership serves to the alignment of the incentives of managers with the incentives of owners.
Business
1 answer:
sergey [27]4 years ago
4 0

Answera dnd Explanation:

A. The incentive conflict in principal-agent relationship as it concerns venture capitalism is conflict between venture capitalists who are the principals and the managers of the business investment who are the agents. The conflict is that venture capitalists are put to increase value of their investment and make profit while salaried managers are only out to feel their pockets through their managerial role in the company as they do not have an interest in the company and are unaffected by the loss or failure of the company. This is known as the principal agent moral hazard issue in venture capitalism

B. By managers maintaining some ownership in the company, there us reduced conflict as managers now see a reason to make sure company succeeds since they have an interest

Venture capitalists aim to have a seat in the board to make sure managers do not take bad decisions since they are able to veto such decisions

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<h3> <u>What is a budget?</u></h3>
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Know more about budget with the help of the given link:

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7 0
2 years ago
Les just bought a megaphone of root beer. As he drinks from the giant cup, he eventually becomes full. One of his friend's comme
MrMuchimi

Answer:

Sink-Cost Fallacy

Explanation:

According to my research on studies conducted by various behaviorists, I can say that based on the information provided within the question the mental bias that describes Les's behavior is called the Sink-Cost Fallacy. This fallacy/bias refers to when an individual relentlessly continues's a behavior solely because of the resources that they have invested, either being time, money, or effort. Which in this case since, Les invested money into the drink so he does not want to waste it even though it might make him sick.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

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Suppose investment spending increases by $50 billion and as a result the equilibrium income increases by $200 billion. the value
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