Startup Valuation and Venture Capital
CMAT 2025 · Innovation & Entrepreneurship · Easy · Startups
Given below are two statements:
Statement I: A startup's valuation is usually lower during the seed funding stage compared to later stages. Statement II: Venture capital is typically the first source of funding for most startups.
In light of the above statements, choose the correct answer from the options given below:
- A.
Both Statement I and Statement II are true.
- B.
Both Statement I and Statement II are false.
- C.
Statement I is true but Statement II is false.
- D.
Statement I is false but Statement II is true.
C
Explanation
Statement I is true: Early-stage/seed valuation is lower as risks are highest. Statement II is false: Initial funding usually comes from personal savings, friends & family, or angel investors before VCs step in.
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