Final answer:
Investors consider factors such as the stage of the company, the availability of information, and the implications of financial capital sources like issuing bonds or stocks. Venture capitalists play a key role in early stages, while bondholders and stock investors may get involved as the company grows and more information becomes available.
Explanation:
When investors assess considerations for making decisions about a company, they must take into account several factors that could influence the potential success of their investment. Early-stage investors, for example, might encounter companies with little to no profits yet have a strategy for future growth by reinvesting profits. In such cases, venture capitalists can provide valuable oversight and capital, while reducing the risk of imperfect information as they often have substantial ownership and better insight into the company's operations.
For firms that are somewhat established, with strategies likely leading to near-term profits, information about the company's products, revenues, costs, and profits becomes more readily available. This wider availability of information allows investors who are not closely connected to the management, such as bondholders and shareholders, to comfortably invest financial capital into the firm. Moreover, the choice between issuing bonds or stock is critical; bonds require consistent interest payments which can deplete a company's cash reserves, while issuing stock does not obligate the company to make such payments, offering flexibility during the growth phase.