Final answer:
Venture capitalists indeed demand high rates of return due to the high risk of investing in startups, considering that while many startups fail, a successful investment can yield substantial returns.
Step-by-step explanation:
True. Venture capitalists demand high rates of return for their investment in a new venture. This is because venture capital investments are typically high-risk, as many startup businesses fail. Venture capitalists understand that they may lose their investment in several companies, but they are willing to take these risks because of the potential for substantial returns from a few successful investments.
Venture capitalists indeed demand high rates of return for their investment in new ventures. This is because investing in startups is a high-risk endeavor, with the understanding that many startups may fail, but a successful one like Netflix or Amazon can provide substantial returns. A substantial venture capital investment was made in 2014, with firms investing over $48.3 billion, illustrating the significant financial stakes involved. They take these risks in hopes of being part of the early-stage development of a highly successful company that can compensate for other investments that don't pan out.