Question 1

Once entrepreneurs obtain money to start a new venture,managing the money is quite easy.

Accepted Answer

A) True 
 B)False

Question 2

Information asymmetry refers to the idea that entrepreneurs and potential investors tend to have different amounts and types of information about a the firm that the entrepreneur wants to start.

Accepted Answer

A) True 
 B)False

Question 3

When dealing with the staging of investment,staging

Accepted Answer

A)  helps to protect investors against efforts by entrepreneurs to use their information advantage to gain at the expense of the investor. 
B)  gives the investor the opportunity to gather information about how the venture is doing before putting more money into the venture. 
C)  helps investors manage the uncertainty of investing in new ventures. 
D)  A and C only. 
E)  A, B, and C. 
A)  helps to protect investors against efforts by entrepreneurs to use their information advantage to gain at the expense of the investor. 
B)  gives the investor the opportunity to gather information about how the venture is doing before putting more money into the venture. 
C)  helps investors manage the uncertainty of investing in new ventures. 
D)  A and C only. 
E)  A, B, and C.

Question 4

Define illiquidity premium and explain why it would be used.

Accepted Answer

Illiquidity premium refers to a demand t

Question 5

Due diligence typically includes an investigation of

Accepted Answer

A)  the business model. 
B)  the market. 
C)  the legal entity. 
D)  the financial records. 
E)  all of the above. 
A)  the business model. 
B)  the market. 
C)  the legal entity. 
D)  the financial records. 
E)  all of the above.

Question 6

An investor has joined a small group of other investors in an attempt to invest a relatively small amount of money in each of 15 different businesses. This is known as

Accepted Answer

A)  geographically localized investing.. 
B)  syndication. 
C)  accurate market analysis. 
D)  accurate profit margins. 
E)  None of the above. 
A)  geographically localized investing.. 
B)  syndication. 
C)  accurate market analysis. 
D)  accurate profit margins. 
E)  None of the above.

Question 7

An investor will provide money for a start-up business only if the entrepreneur will agree to giving the investor the right to approve any purchase or sale of assets totaling $100,000 or more. This is know as

Accepted Answer

A)  a proforma statement. 
B)  a breakeven statement. 
C)  a mandatory redemption. 
D)  a covenant. 
E)  a business angel. 
A)  a proforma statement. 
B)  a breakeven statement. 
C)  a mandatory redemption. 
D)  a covenant. 
E)  a business angel.

Question 8

Like all cost ratios,the return on sales ratio should be kept as low as possible.

Accepted Answer

A) True 
 B)False

Question 9

Because investors in a new business venture cannot sell the investment easily,they might demand some form of extra compensation. This is known as

Accepted Answer

A)  an illiquidity premium. 
B)  a break even charge. 
C)  adverse effect. 
D)  capital method. 
E)  terminal value. 
A)  an illiquidity premium. 
B)  a break even charge. 
C)  adverse effect. 
D)  capital method. 
E)  terminal value.

Question 10

Which of the following is a problem that could be raised by the fact that entrepreneurs have information about their business opportunities that investors don't have?

Accepted Answer

A)  Investors have to make decisions based on limited information. 
B)  Since entrepreneurs have superior information, they can use it to obtain capital from investors and use it for their own benefit. 
C)  The existence of adverse selection. 
D)  A and C only. 
E)  A, B, and C. 
A)  Investors have to make decisions based on limited information. 
B)  Since entrepreneurs have superior information, they can use it to obtain capital from investors and use it for their own benefit. 
C)  The existence of adverse selection. 
D)  A and C only. 
E)  A, B, and C.

Question 11

Which of the following are needed to calculate breakeven?

Accepted Answer

A)  Determine the sales price of the product. 
B)  Estimate the variable cost of the product. 
C)  Estimate the business' fixed costs. 
D)  Divide the fixed costs by the contribution margin percentage to calculate the breakeven sales volume. 
E)  All of the above. 
A)  Determine the sales price of the product. 
B)  Estimate the variable cost of the product. 
C)  Estimate the business' fixed costs. 
D)  Divide the fixed costs by the contribution margin percentage to calculate the breakeven sales volume. 
E)  All of the above.

Question 12

Most new ventures require large amounts of start-up capital.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements about business angels is NOT true?

Accepted Answer

A)  They tend to demand higher return on their investment than venture capitalists. 
B)  The typical business angel is a former entrepreneur. 
C)  Many invest in new companies to stay involved with the entrepreneurial process. 
D)  They generally invest between $10,000 and $200,000 per venture in businesses. 
E)  All of the above statements are true. 
A)  They tend to demand higher return on their investment than venture capitalists. 
B)  The typical business angel is a former entrepreneur. 
C)  Many invest in new companies to stay involved with the entrepreneurial process. 
D)  They generally invest between $10,000 and $200,000 per venture in businesses. 
E)  All of the above statements are true.

Question 14

Any working capital that a new business needs to get started also needs to be included in start-up costs.

Accepted Answer

A) True 
 B)False

Question 15

Explain how the social capital of an entrepreneur can help with raising money to start a new business.

Accepted Answer

Social capital refers to the contacts,or

Question 16

Cash inflows and outflows always occur at the same time as revenues and expenses are incurred.

Accepted Answer

A) True 
 B)False

Question 17

Most investors in new ventures need to focus on a particular industry and geographic location to develop enough expertise to manage their investments.

Accepted Answer

A) True 
 B)False

Question 18

Which one of the following types of debt is the most common for new ventures that do obtain debt financing?

Accepted Answer

A)  Guaranteed by personal assets. 
B)  Asset-based financing. 
C)  Supplier credit. 
D)  A and B only. 
E)  A, B, and C. 
A)  Guaranteed by personal assets. 
B)  Asset-based financing. 
C)  Supplier credit. 
D)  A and B only. 
E)  A, B, and C.

Question 19

The statement of cash flows shows how much money came into the business,and how much went out,over a certain period of time.

Accepted Answer

A) True 
 B)False

Question 20

An entrepreneur wants to start a new business and is writing down estimates of sales,cost of sales,and net profits. This entrepreneur is crating a

Accepted Answer

A)  balance sheet. 
B)  pro-forma income statement. 
C)  cash flow statement. 
D)  selection of adverse impact. 
E)  long-term liability. 
A)  balance sheet. 
B)  pro-forma income statement. 
C)  cash flow statement. 
D)  selection of adverse impact. 
E)  long-term liability.

Once entrepreneurs obtain money to start a new venture,managing the money is quite easy.

Information asymmetry refers to the idea that entrepreneurs and potential investors tend to have different amounts and types of information about a the firm that the entrepreneur wants to start.

When dealing with the staging of investment,staging

Define illiquidity premium and explain why it would be used.

Due diligence typically includes an investigation of

An investor has joined a small group of other investors in an attempt to invest a relatively small amount of money in each of 15 different businesses. This is known as

An investor will provide money for a start-up business only if the entrepreneur will agree to giving the investor the right to approve any purchase or sale of assets totaling $100,000 or more. This is know as

Like all cost ratios,the return on sales ratio should be kept as low as possible.

Because investors in a new business venture cannot sell the investment easily,they might demand some form of extra compensation. This is known as

Which of the following is a problem that could be raised by the fact that entrepreneurs have information about their business opportunities that investors don't have?

Which of the following are needed to calculate breakeven?

Most new ventures require large amounts of start-up capital.

Which of the following statements about business angels is NOT true?

Any working capital that a new business needs to get started also needs to be included in start-up costs.

Explain how the social capital of an entrepreneur can help with raising money to start a new business.

Cash inflows and outflows always occur at the same time as revenues and expenses are incurred.

Most investors in new ventures need to focus on a particular industry and geographic location to develop enough expertise to manage their investments.

Which one of the following types of debt is the most common for new ventures that do obtain debt financing?

The statement of cash flows shows how much money came into the business,and how much went out,over a certain period of time.

An entrepreneur wants to start a new business and is writing down estimates of sales,cost of sales,and net profits. This entrepreneur is crating a

Entrepreneurship:: A Field, an Activity - and a Way of Life

Entrepreneurial Opportunities: Their Origins, Forms, and Suitability For New Ventures

Cognitive Foundations of Entrepreneurship: Creativity and Opportunity Recognition

What Entrepreneurs Need to Know Before They Start: Acquiring and Interpreting Information About Markets Competitors and Government

Assembling the Team: Acquiring and Utilizing Essential Human Capital

Writing An Effective Business Plan: Building A Road Map to Success

Legal Issues Relating To New Ventures: Protecting Your Reputation, Your Assets, And Your Ideas

Marketing in a New Venture

Strategy: Planning For Competitive Advantage

Preparing For And Attaining Growth: Strategies For Building Lasting Success

Managing New Ventures For Growth

Exit Strategies For Entrepreneurs: The Concluding Act

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Exam 6: Financial Resources For New Ventures: How To Get Them, How To Manage Them

Once entrepreneurs obtain money to start a new venture,managing the money is quite easy.

Information asymmetry refers to the idea that entrepreneurs and potential investors tend to have different amounts and types of information about a the firm that the entrepreneur wants to start.

When dealing with the staging of investment,staging

Define illiquidity premium and explain why it would be used.

Due diligence typically includes an investigation of

An investor has joined a small group of other investors in an attempt to invest a relatively small amount of money in each of 15 different businesses. This is known as

An investor will provide money for a start-up business only if the entrepreneur will agree to giving the investor the right to approve any purchase or sale of assets totaling $100,000 or more. This is know as

Like all cost ratios,the return on sales ratio should be kept as low as possible.

Because investors in a new business venture cannot sell the investment easily,they might demand some form of extra compensation. This is known as

Which of the following is a problem that could be raised by the fact that entrepreneurs have information about their business opportunities that investors don't have?

Which of the following are needed to calculate breakeven?

Most new ventures require large amounts of start-up capital.

Which of the following statements about business angels is NOT true?

Any working capital that a new business needs to get started also needs to be included in start-up costs.

Explain how the social capital of an entrepreneur can help with raising money to start a new business.

Cash inflows and outflows always occur at the same time as revenues and expenses are incurred.

Most investors in new ventures need to focus on a particular industry and geographic location to develop enough expertise to manage their investments.

Which one of the following types of debt is the most common for new ventures that do obtain debt financing?

The statement of cash flows shows how much money came into the business,and how much went out,over a certain period of time.

An entrepreneur wants to start a new business and is writing down estimates of sales,cost of sales,and net profits. This entrepreneur is crating a

Entrepreneurship:: A Field, an Activity - and a Way of Life

Entrepreneurial Opportunities: Their Origins, Forms, and Suitability For New Ventures

Cognitive Foundations of Entrepreneurship: Creativity and Opportunity Recognition

What Entrepreneurs Need to Know Before They Start: Acquiring and Interpreting Information About Markets Competitors and Government

Assembling the Team: Acquiring and Utilizing Essential Human Capital

Writing An Effective Business Plan: Building A Road Map to Success

Legal Issues Relating To New Ventures: Protecting Your Reputation, Your Assets, And Your Ideas

Marketing in a New Venture

Strategy: Planning For Competitive Advantage

Preparing For And Attaining Growth: Strategies For Building Lasting Success

Managing New Ventures For Growth

Exit Strategies For Entrepreneurs: The Concluding Act

Filters