Question

Venture capitalists typically create wealth by investing in a start up firm when its stock is less valuable, and then subsequently selling that stock for a higher price during the firm's _________.
A. initial bond issueB. initial liquidity offeringC. initial public offeringD. initial private offering

Answer 1

Venture capitalists typically create wealth by investing in a start up firm when its stock is less valuable, and then subsequently selling that stock for a higher price during the firm's initial public offering.

Answer: Option C

Explanation:

Initial public offer is the shares being given for the very first time by a company. Shares in an initial public offer are usually priced low so that it attracts more buyers.

Venture capital is the process of funding given to small companies which have potential for more growth. Venture capitalists usually buy the shares which are of low price and sell it when the price increases because when that is done, they can earn a profit by doing the same.