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Basic Question 1 of 10
Which statement(s) is (are) true for a venture capital firm?
II. It focuses more on EBIT growth rather than revenue growth.
III. It typically conducts full blown due diligence approach before investing in the target firm (financial, strategic, commercial, legal, tax, environmental).
I. It usually has a specialized industry focus (e.g., technology).
II. It focuses more on EBIT growth rather than revenue growth.
III. It typically conducts full blown due diligence approach before investing in the target firm (financial, strategic, commercial, legal, tax, environmental).
User Contributed Comments 1
| User | Comment |
|---|---|
| rhardin | Yes, the companies may have no or little operating history, but you still perform due diligance on the history that is there. I don't know if I agree with III being wrong... If I am investing in a venture capital firm, they better be performing due diligence on all available info, including financial info! |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
compare and contrast characteristics of buyout and venture capital investments;
interpret LBO model and VC method output;
explain alternative exit routes in private equity and their impact on value;
CFA® 2024 Level II Curriculum, Volume 5, Module 38.