Why it is said that “A venture capitalists investments are illiquid� – InterviewSolution

InterviewSolution

1.	Why it is said that “A venture capitalists investments are illiquid”. Give reason.
Answer» Illiquid describes an asset or security that cannot be sold quickly. Uncertainly the asset value is associated with the investment. This can be due to economic instability or issues relating to the asset. If the asset value declines, it becomes an illiquid asset due to the unclear value. It can be hard to locate a market for these products. This may lead to loss of the money.

Discussion

No Comment Found

Related InterviewSolutions

Why it is said that “A venture capitalists investments are illiquid”. Give reason.
When can an entrepreneur seek venture capital financing?
“TFCI is playing vital role in the development of entrepreneurship in modern economy”. Comment.
Why is stock exchange important for an investor?
What do you understand by Private placement of shares?
By offering shares to its employers what values are promoted by a company.
Mr. B the financial Manager of ABC Company purchases 100 shares of the Company just before the rights issue was announced. Is the behaviour of the manager ethical? What would you do as a legal advisor of the company?
What do you mean by “Financial Intermediation”?
How stock options method enables employees to become shareholders and share the profits?
For the smooth and orderly functioning of corporate sector in a free market economy, stock exchanges are indispensable because of different roles played by them for different groups.’ Explain the importance of stock exchange to investors in the light of this statement.