Banking · Venture Capital
Venture Capital, as a specialized form of private equity, provides capital to high-growth potential companies in their early stages of development. Considering the structural and functional aspects of these investments, what is the primary and fundamental purpose of a Venture Capital fund when it enters into an agreement with a technology startup?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1To facilitate the immediate public listing of the startup on the main board of the stock exchange within the first six months of the initial investment.
- 2To act as a primary lender and ensure that the startup maintains a high debt-to-equity ratio to benefit from tax shields on interest payments.
- 3To obtain long-term capital appreciation by taking an equity stake in a high-risk, high-reward venture that lacks access to traditional capital markets.✓
- 4To provide short-term working capital loans with low interest rates to help the company manage its daily operational expenses and inventory costs.
Correct answer
To obtain long-term capital appreciation by taking an equity stake in a high-risk, high-reward venture that lacks access to traditional capital markets.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Banking?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Venture Capital MCQs →Want more practice questions on Venture Capital?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Banking · Venture Capital