Why do very small companies tend to raise money

Reference no: EM132120975

Question: Answer these three questions about early-stage corporate finance:

a. Why do very small companies tend to raise money from private investors instead of through an IPO?

b. Why do small, young companies often prefer an IPO to borrowing from a bank or issuing bonds?

c. Who has better information about whether a small firm is likely to earn profits, a venture capitalist or a potential bondholder, and why?

Reference no: EM132120975

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