Impact of Capital Structure on Company Valuation in M&A
when the venture capitalist invests in start-up, he goes for a calculated risk.
In simple words, they are wagering that the company will eventually turn out
to become successful and increase in value over time. Hence, on the positive
note, if the company succeeds, then the venture investor will make a huge
profit when he sells his share. On the negative note, if the company fails, then
he makes a loss on investment.