Identify the correct sequence of events that happen while seeking funds from a venture capital in the start up finance stage.
(a) A management team is formed to run the venture.
(b) A prototype is being developed and fully tested.
(c) If the company has a board of directors, a person from the VC will take seats at the BOD.
(d) The management team establishes a feasible production line to produce the product.
(e) A Business Plan is presented by the entrepreneur to the ventures capital firm.
Choose the most appropriate answer from the options given below:
Answer & explanation
Correct answer: option 1
If the idea/product/process is qualified for further investigation and/or investment, the process will go to the second stage; this is also called the start-up stage.
A business plan is presented by the entrepreneur to the VC firm.
A management team is being formed to run the venture.
If the company has a board of directors, a person from the VC firms will take seats at the board of directors.
While the organisation is being set up, the idea/product gets its form. The prototype is being developed and fully tested. In some cases, clients are being attracted for initial sales.
The management-team establishes a feasible production line to produce the product. The VC firm monitors the feasibility of the product and the capability of the management-team from the board of directors.