Question

UPSC Prelims 2014 Question:

What does venture capital mean?

1. A short-term capital provided to industries
2. A long-term start-up capital provided to new entrepreneurs
3. Funds provided to industries at times of incurring losses
4. Funds provided for the replacement and renovation of industries

Answer (Detailed Solution Below)

Option 2: A long-term start-up capital provided to new entrepreneurs

Detailed Solution

Explanation:

Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.
Venture capital generally comes from well-off investors, investment banks, and other financial institutions.
However, it does not always take a monetary form; it can also be provided in the form of technical or managerial expertise.
Venture capital is typically allocated to small companies with exceptional growth potential, or to companies that have grown quickly and appear poised to continue to expand.

Therefore, option (2) is the correct answer.

Subject: Economics | Industry

Latest UPSC Exam 2026 Updates

Last updated on Sep, 2026

→ UPSC 2027 Notification will be released on 13 January 2027 at upsconline.nic.in.

Tags: Conceptual

Prafulla Vats

Prafulla Vats is an experienced SEO and content strategist with over 4 years of expertise in driving organic growth across education and service niches. He specializes in crafting data-driven content strategies that help students and professionals access accurate, well-researched information. Through his work, he focuses on improving visibility, engagement, and trust through high-quality, SEO-optimized content.