Official Guide for GMAT Verbal Review, 2nd Edition
Question No.: 20
Start-up companies financed by venture capitalist have a much lower failure rate than companies financed by other means. Source of financing, therefore, must be a more important causative factor in the success of a start-up company than are such factors as the personal characteristics of the entrepreneur, the quality of strategic planning, or the management structure of the company.
Which of the following, if true, most seriously weakens the argument above?
(A) Venture capitalists tend to be more responsive than other sources of financing to changes in a start-up company’s financial needs.
(B) The strategic planning of a start-up company is a less important factor in the long-term success of the company than are the personal characteristics of the entrepreneur.
(C) More than half of all new companies fall within five years.
(D) The management structures of start-up companies are generally less formal than the management structures of ongoing businesses.
(E) Venture capitalists base their decisions to fund start-up companies on such factors as the characteristics of the entrepreneur and quality of strategic planning of the company.
please explain the reasoning.