Final answer:
Investors consider lack of transparency, unrealistic financial projections, and high levels of debt as red flags suggesting high risks in a venture. Positive indicators include clear business models, profitability, and experienced teams. Angel investors and venture capitalists help early-stage firms by providing expertise and assessing founders' commitment.
Step-by-step explanation:
Common red flags for investors that suggest the risks associated with a venture may be too great include C) Lack of transparency, unrealistic financial projections, and high levels of debt. A well-defined business model and clear revenue streams, consistent profitability and steady growth, and a strong team with diverse skill sets and experience are typically seen as positive indicators. In contrast, lack of transparency can indicate that the company is not providing enough information for investors to assess the situation accurately, unrealistic financial projections may point to overoptimism or a lack of understanding of the market, and high levels of debt can strain a company's financial stability and increase the risk of insolvency.
Addressing early-stage corporate finance concerns, angel investors and venture capitalists look for signs of commitment from founders, such as personal investment, and often provide guidance to mitigate information asymmetry and enhance the prospects of a young startup firm.