86.9k views
1 vote
Which of the following questions would help assess the effectiveness of a corporation's venturing initiatives?

a. does the venture add to the company's internal competencies in a valuable way?
b. is the venture able to sustain its basis of competitive advantage?
c. are the products or services a market success?
d. do the product or services provide the company a first mover advantage?

User YwH
by
8.2k points

1 Answer

0 votes

Final answer:

Assess a corporation's venturing initiatives, one should consider if the initiatives add value to the company's competencies, sustain a competitive advantage, achieve market success, and offer a first mover advantage. In early-stage financing, small companies favor private investment for flexibility, IPOs for capital without immediate repayments, and venture capitalists often have better information than typical bondholders because of their involvement.

Step-by-step explanation:

Assessing the Effectiveness of a Corporation's Venturing Initiatives

When assessing the effectiveness of a corporation's venturing initiatives, several questions could be crucial:

  • Does the venture add to the company's internal competencies in a valuable way?

  • Is the venture able to sustain its basis of competitive advantage?

  • Are the products or services a market success?

  • Do the product or services provide the company a first mover advantage?

These questions look into different aspects of a venture's potential success, including its alignment with the company's core competencies, sustained competitive edge, market performance, and potential benefits of being a first entrant.



Early-Stage Corporate Finance

Regarding early-stage corporate finance, here are several points:

  • Very small companies tend to raise money from private investors instead of going public through an Initial Public Offering (IPO) due to less regulatory complexity and a need for faster, more flexible financing.

  • A preferential tilt towards an IPO over borrowing through loans or issuing bonds by small, young companies might be due to the non-requirement to make immediate returns, freeing up cash for reinvestment.

  • Venture capitalists typically have better information regarding a small firm's profitability because they are often much more involved in the management and strategy, thereby reducing informational asymmetry.

An IPO can provide access to a larger pool of capital for small, burgeoning companies while allowing original investors and founders to realize a part of their investment’s value by selling shares to public investors.

Venture capitalists, being more closely connected to the day-to-day operations and holding substantial equity, typically possess intimate knowledge of the firm's potential and current state.

User Ankakusu
by
8.3k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.