Which term describes the financing provided to high-growth small and medium enterprises by professional investors?

Which term describes the financing provided to high-growth small and medium enterprises by professional investors?

• A. Angel
• B. Venture Capital
• C. Debt Capital
• D. Pro forma

Answer: (B)

Venture capital is financing provided by professional investment firms to high-growth small and medium enterprises, usually in exchange for equity and a role in guiding the company. These investors pool capital from institutions and wealthy individuals and focus on startups or growth-stage firms with strong potential, expecting significant returns through an exit such as an IPO or acquisition. This description fits best because it specifically involves professional investors funding rapidly growing companies and typically involves equity and strategic support. In contrast, angel investors are individuals rather than professional funds, debt capital involves loans rather than equity, and pro forma refers to a projected financial statement rather than a source of financing.

Venture capital is financing provided by professional investment firms to high-growth small and medium enterprises, usually in exchange for equity and a role in guiding the company. These investors pool capital from institutions and wealthy individuals and focus on startups or growth-stage firms with strong potential, expecting significant returns through an exit such as an IPO or acquisition. This description fits best because it specifically involves professional investors funding rapidly growing companies and typically involves equity and strategic support. In contrast, angel investors are individuals rather than professional funds, debt capital involves loans rather than equity, and pro forma refers to a projected financial statement rather than a source of financing.