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Both venture capitalists and angel investors receive equity in the startup in exchange for their investment.Group of answer choicesTrueFalse

Question

Both venture capitalists and angel investors receive equity in the startup in exchange for their investment.

  • Group of answer choices
    • True
    • False
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Solution

Answer: True

Both venture capitalists and angel investors indeed receive equity in a startup in exchange for their investment.

Venture capitalists (VCs) typically invest larger amounts of money into companies that are at a more advanced stage in their development, and they often require a significant ownership stake in return for their funding.

Angel investors, on the other hand, usually invest smaller sums and are often individuals who provide personal funds. While the amounts may differ, both types of investors expect to gain equity, meaning they share in the potential growth and success of the startup.

In summary, it is correct to say that both venture capitalists and angel investors receive equity in the startup in exchange for their investment.

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