Asked by Talyn Rhodes on May 13, 2024

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Farah is an engineer with an idea for a flexible solar energy material that would have a wide range of military and civilian applications.She estimates that she will need approximately $300,000 to develop a prototype.Friends and family could provide about $75,000.She contacts Natalie,an angel investor,for this purpose.In this case,which of the following is likely to be true?

A) Farah is likely to receive a report from Natalie that is more thorough than those by formal venture capitalists.
B) Natalie is likely to be a wealthy individual with expertise in the field.
C) Farah is unlikely to expect more than just financial support from Natalie.
D) Natalie is unlikely to be a private investor.

Angel Investor

An affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.

Venture Capitalists

Investors who provide capital to startup companies and small businesses with long-term growth potential in exchange for equity.

Financial Support

Monetary assistance provided to individuals or organizations to help cover costs or fund activities.

  • Grasp the role and expectations of angel investors in startup financing.
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JU
Joseph Ulengco

May 14, 2024

Final Answer :
B
Explanation :
Angel investors are typically wealthy individuals who invest in startups or early-stage companies, and they may have some expertise in the field. They often provide not only financial support but also business advice and industry connections to their portfolio companies. Therefore, it is likely that Natalie is a wealthy individual with some knowledge or experience in the renewable energy sector. Choice A is incorrect because there is no evidence to suggest that angel investors provide more thorough reports than formal venture capitalists. Choice C is incorrect because angel investors often offer more than financial support. Lastly, choice D is incorrect because angel investors are private investors, meaning they invest their own funds rather than institutional money.