Correct Answer: It is less risky, gives the right to demand repayment, and earns interest.
Explanation:
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More Venture Capital MCQ Questions
Which would be a possible portfolio for a venture capital firm?
What protection do investors in a venture capital fund have?
What is meant by 'exit strategy'?
What options does a venture capitalist have when holding convertible debt?
How much in funding, in general, will an investor want to invest?
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Would a venture capitalist want to have majority control of the board even without majority stock ownership?
Why would a merger with another company also be considered an investment exit?
Why is the venture capitalist in charge of the drawing up of the term sheet and not the target company?
Why would specialized consultants be hired for the final stage of the due diligence process?