At one time new businesses that needed money borrowed it


At one time new businesses that needed money borrowed it from the local banker, or from rich investors and other people who had already made money. Then the roll of providing capital to new ventures moved away from traditional banks to venture funds, angel investors, private equity funds and hedge funds. Over the past 20 years we have seen a trend where the government has restricted capital formation for early stage investors through zealous regulation and enforcement. At the same time, state and federal governments have become one of the primary sources of capital for new businesses, through agencies such as the SBA, through numerous loan guarantee programs, and through outright grants and give-a-ways. Discuss two benefits to government involvement in funding businesses, and two risks. Do the risks outweigh the benefits?

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Financial Management: At one time new businesses that needed money borrowed it
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