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Venture capital comes from wealthy investors, usually a group, who see the potential for growth in smaller businesses. In the early 1990’s the Securities and Exchange Commission (SEC) expanded its role to assist small businesses. The SEC made it easier for small businesses to raise capital through public stock offerings (Iannaconi, 1993).
Corporations also raise money to finance debt. Businesses sell bonds to investors in order to raise money for working capital and capital expenditures. The corporation agrees to pay back the principal plus interest, therefore making the investors creditors...
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