There's one reliable indicator to demonstrate that a startup informati

Question

There's one reliable indicator to demonstrate that a startup information technology company is successful. When one of the global IT giants, a Microsoft or an Intel, for instance buys a major stake in the company, you can bet that its business focus and products are on target.

Which of the conclusions can be best drawn from the passage above?

A. Microsoft and Intel invest in startups only after extensive research.

B. A startup cannot be taken seriously unless some reputed company buys a major stake in it.

C. Investment by a major IT company proves that the fundamentals are on target for a startup.

D. Other venture capitalists invest in startups only after a reputed firm has invested first.

E. Business focus and products must be on target for a big IT firm to invest in a startup

arun6765 · Answer

Only E seems correct. rest all choice are a mere wishful conclusion.

For E the support is given by the last sentence of the argument. (you can bet that its business focus and products are on target.)

Hope it helps.

AdityaHongunti · Answer

E is very poorly worded ,

Business focus and products must be on target for a big IT firm to invest in a startup
 - focus and products must be on target for the big IT firm??? sounds so ambiguous. 
what's the source?? can't be an official one

rahul6019 · Answer

Yes, choice E is very poorly worded and I rejected it for the same reason.

disenapati · Answer

OE is as follows:

Explanation:
(A) Nothing is mentioned about the thoroughness of research conducted by big companies before they invest in startups.

(B) The passage does not necessarily imply that a startup cannot be taken seriously unless some reputed company has stake in it. In formal logic terms, "All A is B" does not necessarily mean "Only A is B".

(C) This is again an implicit statement that cannot be concluded directly from the passage. All fundamentals do not necessarily need to be perfect for big companies to invest in smaller ones. The passage mentions only two precise aspects of such decision-making.

(D) The passage mentions only a single example meaning this generalization cannot be logically drawn from the passage.

(E) Correct. This answer follows clearly and directly from the first two lines of the passage; if investment by a big IT firm means that business focus and products are on target then it must follow that these are requisite attributes for a big IT company to invest in a startup

Source - IMS GMAT TEST SERIES

militarytocorp · Answer

A. Microsoft and Intel invest in startups only after extensive research.

B. A startup cannot be taken seriously unless some reputed company buys a major stake in it.

C. Investment by a major IT company proves that the fundamentals are on target for a startup.

D. Other venture capitalists invest in startups only after a reputed firm has invested first.

E.  Business focus and products must be on target for a big IT firm to invest in a startup  best choice
 
The investment by a big IT firm means that business focus and products are on target and it implies that the requisite attributes for a big IT company to invest in a startup has been met.

Nnamdi92 · Answer

Stimulus summarily says:

- An IT startup business launches products and services
- It becomes successful - but there is no indication
- Bigger and established IT organizations discover the startup and buys a stake with it - this is now a clear indication that the startup is doing fine

It's a close battle between options C and E. They are very similar

But C seems like putting the cart before the horse. C says that whether or not the startup is actually successful, once another big IT organization invests in it, that means they are successful.

This is not entirely true because the stimilus says that the startup has to be succesful before a big IT organization stakes on it.

Only E does precise justice to the question by implying that the startup must have gotten their acts right before a big IT orgazations stakes on them being more successful

Posted from my mobile device

sidharth2412 · Answer

E is very poorly worded, it implies that business focus and products on target is the work of Big IT firm to be able to invest in a startup
rest the essence of E is correct for the conclusion but the choice of words is absurd.

VerbalBot · Answer

Automated notice from GMAT Club VerbalBot: 

A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.

 This post was generated automatically.

There's one reliable indicator to demonstrate that a startup informati

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

There's one reliable indicator to demonstrate that a startup informati

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards