Exam 10: Getting Financing or Funding

According to the textbook, beyond their own funds, the second source of funds for many new ventures is ________.

According to the textbook, many entrepreneurs go about the task of raising capital haphazardly because they ________.

Bootstrapping is the process of combining personal funds, equity investments, and bank financing to launch a business.

The vast majority of founders contribute personal funds along with sweat equity to their ventures.

Steven and Emily Campbell are planning to open a casual dining restaurant in downtown Akron, Ohio, and need $125,000 to get started. They have $50,000 of their own money, which leaves $75,000. After getting turned down by a couple of banks, they decided to turn to their relatives and acquaintances for help. Fortunately, they were able to raise the money through a gift from Steven's grandfather, a loan from Emily's parents, and a small investment by Steven's best friend in college, Doug. The money that an entrepreneur raises in this manner is referred to as ________.

Debt financing involves ________.

Fundable and Crowdfunder are examples of ________-based crowdfunding sites.

Once a venture capitalist makes an investment in a firm, subsequent investments are made in rounds and are referred to as ________.

Peter Simmons owns a specialized computer software company. Although Peter's software designers and programmers are very good, it takes 2-3 years to develop a good software product. This example illustrates the need for funding or financing referred to as ________.

The Savvy Entrepreneurial Firm feature in Chapter 10 focuses on the manner in which biotech firms and large drug companies work together to bring pharmaceutical products to market. According to the feature, the most compelling partnerships are those that help entrepreneurial firms focus on what they do best, which is typically ________, and that allow them to tap their partners' complementary strengths and resources.

An important part of obtaining venture capital funding is going through ________ diligence, which refers to the process of investigating the merits of a potential venture and verifying the key claims made by the business plan.

The three most common forms of equity funding are ________.

According to the textbook, the unique value provided by business angels is they ________.

The ________ Program is a competitive grant program that provides over $2.5 billion per year to small businesses for early-state and development projects.

The three common sources of "personal" financing for a startup firm are personal funds, friends and family, and bootstrapping.

The two major advantages of getting a loan versus investment capital are ________.

Venture capital is money that is invested by venture capital firms in startups and small businesses with exceptional growth potential.

The three reasons that most firms need to raise money during their early life are cash flow challenges, capital investments, and lengthy product development cycles.

The What Went Wrong? feature in Chapter 10 focuses on DrawQuest. DrawQuest captured the attention of venture capitalists, gained 25,000 users, and still failed. According to the feature, the main reason DrawQuest failed is that the founders ________.

Katy Anderson's startup, which is in the organic fruit and vegetables industry, was launched on January 1, 2015. However, prior to its formal launch, Katy spent many hours working on her business, particularly during the feasibility analysis stage. The time and effort that entrepreneurs put into their venture, that can't be easily measured from a financial point of view, is referred to as ________ equity.