Consider the following characteristics : (a) High risk high return opportunity (b) Small and medium size enterprise (c) Private equity stakes in start-ups (d) Investment fund The above attributes are found in :
Venture Capital Funds
All four attributes describe venture capital: a pooled investment fund that takes private equity stakes in young, usually unlisted start-ups and small or medium enterprises, accepting high risk for the chance of high returns, and exiting later through a public issue or a strategic sale.
Mutual funds pool savings from the public and invest mainly in diversified, listed securities and debt instruments; they do not specialise in equity of unlisted start-ups.
Qualified Institutional Buyers are a SEBI category of large institutions (banks, insurers, mutual funds, foreign portfolio investors and others) eligible to bid in the QIB portion of public issues. It is an investor classification, not a type of fund.
Domestic Institutional Investors, such as LIC, banks and domestic mutual funds, invest largely in listed securities rather than in early-stage firms.
Hence, Venture Capital Funds.
Similar Questions
Financial Instruments which are issued with detachable warrants and are redeemable after certain period is known as :
Important Questions from Types of Financing
Match the items of List-II with the items of List - I and indicate the correct code :
List – I
List – II
(a)
Term finance
(i)
Providing finance to new or existing
industrial units for encouraging commercial
application of technology/expansion.(b)
Refinance
(ii)
Delivering of banking services at affordable
cost to the vast sections of disadvantaged
and low-income groups.(c)
Financial inclusion
(iii)
Providing replenishment finance to eligible
institutions for their loans to industrial
concerns.(d)
Venture capital
(iv)
Providing finance to the borrowers for
expansion and modernization of plant
and equipment.- Which of the following statements are True ?
A. Preference capital represents a hybrid form of financing.
B. Preference capital carries definite legal obligation.
C. Retained earnings represent the profits ploughed back in the business.
D. Disadvantages of equity capital are that it represents a permanent source of finance.
E. Equity share holders do not have right to claim over assets in the event of liquidation
Choose the correct answer from the options given below : Financial Instruments which are issued with detachable warrants and are redeemable after certain period is known as :
