Which of the following is a major difference between banks and venture capitalists as categories of private financing?
A) Unlike banks, which recruit investment specialists, venture capitalists are private investors without any specialized investment skills.
B) Unlike banks, which provide investment for high-risk businesses, venture capitalists won't lend money to a start-up that hasn't established a successful record of accomplishment.
C) Unlike banks, which don't require collateral, venture capitalists provide investments only when an entrepreneur puts up marketable collateral.
D) Unlike banks, which only provide money, venture capitalists also provide management expertise.
E) Unlike banks, which are extremely focused and selective in giving loans, venture capitalists are less focused and provide loans to a large number of start-ups.
Answer: D
Explanation: Unlike banks or most other financing sources, venture capitalists do more than simply provide money. They also provide management expertise in return for a sizable ownership interest in the business.
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