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A Venture Capital Fund currently holds a significant  shareholding in a large private company as...

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A Venture Capital Fund currently holds a significant  shareholding in a large private company as a result of funding a recent management buyout. It plans to exit this investment in 5 years time at a significant profit.

 

Which THREE of the following exit mechanisms are most likely to be preferred by the Venture Capital Fund?

A.

The management team agrees to buy back the Venture Capital Funds shareholding in 5 years time at its original cost.

B.

The private company obtains a stock market listing on a recognised exchange within the next 5 years.

C.

The Venture Capital Fund has an option to sell its shareholding to the company at twice its original cost which can be exercised in 5 years time.

D.

The Venture Capital Fund has a legal entitlement to sell its shareholding to any third party investor if the company has not obtained a stock market listing within 5 years.

E.

The management team has an option to buy the Venture Capital Fund's shares for their nominal value which can be exercised in 5 years time. 

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