Asked by Klaudia Kuzia on Jul 25, 2024

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Companies preparing for initial public offerings (IPOs)are attractive to mezzanine investors.

Initial Public Offerings (IPOs)

The process through which a private company goes public by selling its shares to the general public for the first time.

Mezzanine Investors

Investors who provide capital to businesses in the form of subordinated debt or preferred equity, often representing a middle layer of financing between senior debt and common equity.

Attractive

Pleasing or appealing to the senses, often used in marketing to describe products or services that draw customer interest.

  • Identify the characteristics and motivations of different types of investors such as angel investors, venture capitalists, and mezzanine investors.
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Verified Answer

MC
megan coutsJul 30, 2024
Final Answer :
True
Explanation :
This statement is true. Mezzanine investors are attracted to companies preparing for IPOs because they offer the potential for high returns on their investment. Mezzanine financing typically involves providing capital in exchange for equity or convertible debt, which can be converted into equity upon the company's IPO. Therefore, mezzanine investors stand to benefit from the company's growth and eventual exit through the IPO.