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sir i was doing a past paper question of due diligence assignment and the target company was financed through venture capital , and in the solution it was written that a great risk is that venture capitalists may be expected to leave after 2 -3 years of invesment, can u shed some light on this ?
I suppose that you could say that “venture” is really an abbreviation for “adventure” and when it comes to financing a risky venture, 3 years is enough time to expose your investment
So it would not be unusual for an (ad)venture capitalist to look harshly at their investment and, if it’s not hitting pre-established targets, to sell and move on
Does that explain it?
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