Problem
1. Explain how the venture capital industry operates. Identify the type of firm that is likely to attract venture capitalists, and explain how they normally expect to generate a profit. Compare the return on investment with that from other investment categories.
2. Venture capital significantly contributes to the financing of young companies. Identify the types of company that are likely to attract venture capital, and outline how a significant return on investment can be expected.
3. Describe how a company will attempt to raise capital through an Initial Public Offering. You should include all aspects of the involvement by an investment bank, including the underwriting arrangements. Consider all costs that are involved, including the impact of under-pricing. (10 Marks)
4. Explain how the venture capital industry operates. In your answer, identify the type of firm that is likely to attract venture capitalists, and explain how they can expect to generate a return on their investment. Compare the return with that from other investment categories.