raising money & financials - savings and bank loans reading quiz\nquestion 5 of 10: when a venture…

raising money & financials - savings and bank loans reading quiz\nquestion 5 of 10: when a venture capitalist offers an entrepreneur $100,000 for shares representing 20% of a company, it is a form of:\n a) bank loan\n b) debt financing\n c) promissory note\n d) equity financing

raising money & financials - savings and bank loans reading quiz\nquestion 5 of 10: when a venture capitalist offers an entrepreneur $100,000 for shares representing 20% of a company, it is a form of:\n a) bank loan\n b) debt financing\n c) promissory note\n d) equity financing

Answer

Brief Explanations:

Equity financing involves selling a stake in the company. Here, the venture - capitalist is getting 20% of the company in exchange for $100,000, which is characteristic of equity financing. A bank loan is a debt from a bank, debt financing involves borrowing money that must be repaid with interest, and a promissory note is a written promise to pay a debt.

Answer:

D. Equity financing