This arrangement is more common with speculative securities and with new companies. With a firm commitment, the underwriters purchase outright the securities being offered by the issuer. Upside Potential Opportunity for capital appreciation by applying resources and management skills to enhance strategies, improve asset utilization, or expand a company's business. Venture Capital Money used to purchase equity-based interest in a new or existing company. A venture capitalist's return usually comes from preferred stock, a share of profits, royalties or capital appreciation of common stock.
Most venture capitalists look for companies with high growth potential.
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