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Resource Mobilization — Entrepreneurship STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEntrepreneurshipResource Mobilization3 Marks
Question
How stock options method enables employees to become shareholders and share the profits?
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Answer

Venture capital finance has the following features:
  1. It is basically equity finance in relatively new companies.
  2. It is long-term investment in growthber oriented small or medium firms.
  3. Venture capitalists not only provide capital but also business skills to investee firms.
  4. It involves high risk-return spectrum.
  5. It is a subset of private equity.
  6. The venture capital institutions have a continuous involvement in the business after making the investment.
  7. Such institutions disinvest the holdings either to the promoters or in the market.

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