FinWord

What is Venture Capital?

It is a form of project finance which invests in the initial stages of the life cycle of a business. It takes place post angel investment or can also be the first form of capital raised by a new business. The Venture capitalists are experienced investors, having a wide variety of knowledge on a range of subjects. Hence, the expertise of a venture capitalist is what differentiates venture capital from angel investors.
The investment can be in the form of an equity stake in the company or even as debt and is popularly known as seed capital.
In India, less than 10% of VC Investment comes from Domestic Investors.
They are also subject to exemption from Income Tax subject to fulfillment of certain conditions.
Venture Capital Definition 

What is an Angel Investment? 


It is the first stage of financing of a new venture. The investment in the venture is made when the venture is yet to start on the basis of the business idea or during the initial requirement of capital. Capital is usually raised from Friends or Family.


This type of Investment involves a high amount of risk and is done on the basis of personal faith. The investor generally receives a stake in the company for his capital. Angel Investment is exempt from Income Tax subject to fulfillment of certain conditions, hence promoting the startup culture in the country.

Angel Investment Definition 

 


What is Article 50 of Brexit Vote? How is it relevant?


It is a provision in the European Union(EU) Law, under which any member state can unilaterally withdraw from the EU, as per its requirements.

It is a part of the Lisbon Treaty, which came into effect since 2007, in order to make the EU more transparent.

This article was invoked by the UK on 29 March 2017, after the majority Brexit vote, and this officially began the process for the withdrawal of the UK from the EU.
Post its invocation, the process to officially withdraw from the EU needs to be completed within 2 Years.
It can be unilaterally revoked, though doing so may result in a heavy penalty and foregoing of previous benefits.
Article 50 Definition 


What are Credit Rating Agencies? Are they reliable? 

Credit Rating Agencies are independent organizations which conduct research on the quality of the assets of companies. On the basis of a multitude of parameters, they assign a rating, which they revise from time to time on account of changing conditions of the economy, industry and the company.

Interestingly, they are not legally liable in case their ratings fall short of the actual asset quality.

Hence, their ratings must be taken with caution and shouldn’t be the sole criteria of investment. To a large extent, they were responsible for the 2008 US Financial Crisis and the IL&FS Fiasco.

Credit Rating Agencies Definition 



FinWord FinWord Reviewed by Porush Puri on January 06, 2019 Rating: 5

No comments:

Powered by Blogger.