Travis has been running a small manufacturing business. He now plans to raise more finance through venture capitalists. Which disadvantage of

such financing might Travis face in the future?

A

B.

OC

D.

Travis will never be able to retain any profits.

Travis will lose some business control to his investors.

Travis will need to pay his investors interest every month.

Travis will have to provide security to the investors in return of the investment.

Question

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Lena

5 August, 18:26

Travis has been running a small manufacturing business. He now plans to raise more finance through venture capitalists. Which disadvantage of

such financing might Travis face in the future?

A

B.

OC

D.

Travis will never be able to retain any profits.

Travis will lose some business control to his investors.

Travis will need to pay his investors interest every month.

Travis will have to provide security to the investors in return of the investment.

+2

Answers (1)

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Carter Foster · Answer 1

Travis will lose some business control to his investors.

Explanation:

Venture capital is invested by investors when a company is starting to operate, or when it is about to expand capacity. Venture capital is risky because there is no guarantee that the starting firm will succeed.

Investors put venture capital in companies in exchange for equity ownership. In other words, venture capital is almost the same as stocks.

If Travis accepts the venture capital contributions, he will have to give up some ownership of the firm to investors.