A venture capital fund manager provides funding at various stages of business growth, taking into consideration factors such as the investment…
CA Final · Advanced Financial Management · PYQS · May 2025
A venture capital fund manager provides funding at various stages of business growth, taking into consideration factors such as the investment horizon, risk perception, and the specific activities to be financed. You are required to complete the risk matrix provided below: Financial stage Locking Period Risk Perception Activity to be Financed Seed money Start up Second stage Fourth stage
Suggested Answer and Working Notes:
Financial Stage Locking Period Risk Perception Activity to be financed Seed Money 7-10 Extreme For supporting a concept or idea or R&D for product development and involves low level of financing. Start Up 5-9 Very High Initializing prototypes operations or developing products and its marketing. Second Stage 3-5 Sufficiently high Expanding market and growing working capital needs though not earning profit. Fourth Stage 1-3 Low Facilitating public issue i.e. going public. Also called Bridge Financing.
Topics: Startup Finance, Securitization
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