Which is the round of funding where the business should be generating some external revenue?

A) start-up capital
B) development capital
C) expansion capital
D) exit

Question

Which is the round of funding where the business should be generating some external revenue?

A) start-up capital
B) development capital
C) expansion capital
D) exit

Quizplus · Accepted Answer

By round three,the expansion capital stage the business should be generating some external revenue.However,costs still outweigh revenue,such that the business is still making losses.In order to generate profits,the business needs to scale up its operations.Expansion of production and markets will enable the business to reap economies of scale.Thus,expansion capital is needed to allow the firm to grow by expanding its capacity.

Which Is the Round of Funding Where the Business Should