The following appeared in a letter from the Corporate Finance department of a firm to the Board of Directors:The concept of venture capitalist funding is relatively new in country Xinda. Merely 10 years ago, a few of the world's most prominent venture cap

The argument claims that 10 years ago, a few of the prominent venture capitalist firms invested in young companies with high growth potential. Today, many such companies are doing exceptionally well. Hence, in order to sustain our status of a prominent business conglomerate in Xinda, the company should invest heavily in all future companies backed by such venture capitalist funding. Stated in this way the argument fails to mention several key factors on the basis of which it could be evaluated. The conclusion of the argument relies on assumptions for which there is no clear evidence. Therefore, the argument is weak, unconvincing and has several flaws.

First, the argument has assumed that future companies will give the same result as the past companies. Past performance is no guarantee of future results. The performance of the future companies could be dependent on many factors which might even not be present 10 years ago. For example, huge competition in the market including big companies which might not be there 10 years ago, changes in government policies, changes in demographics of the country, and many more. If the argument had provided any evidence about all the factors affecting the performance of the company 10 years ago and now, then the argument would have been a lot more convincing.

Moreover, the argument has not given any information about the venture capitalist. It could be that the venture capitalist 10 years ago and now are different or they might have changed their funding strategy, for example, the venture capitalist, 10 years ago, has focused more on the revenue generated by the company, but now they are more focused on the companies which are eco-friendly or which are involved into social work and not generate profits. If the author has provided substantial information about venture capitalist from both the time period, then the argument could have been more logical.

In summary, the argument, in its current state, is flawed in the light of above mentioned reasons and is therefore unconvincing. It could be considerably strengthened if the author clearly mentioned all the relevant facts and all the contributing factors, which in this particular case, the assumption that the performance of the future companies will follow the trend of the performance of the companies from 10 years ago and the information about the venture capitalist from both the time period. Without all of this information, the argument remains unsubstantiated and open to debate.