Question 1

Venture capital firms are ________ of money managers who raise money in "funds" to invest in startups and growing firms.

Accepted Answer

A)  limited partnerships 
B)  finance associations 
C)  consortiums 
D)  collations 
E)  strategic partnerships 
A)  limited partnerships 
B)  finance associations 
C)  consortiums 
D)  collations 
E)  strategic partnerships A

Question 2

Equity investors typically have a ________ investment horizon.

Accepted Answer

A)  1 to 3 year 
B)  2 to 4 year 
C)  3 to 5 year 
D)  4 to 6 year 
E)  5 to 7 year 
A)  1 to 3 year 
B)  2 to 4 year 
C)  3 to 5 year 
D)  4 to 6 year 
E)  5 to 7 year C

Question 3

Which of the following statement is not correct regarding business angels?

Accepted Answer

A)  Business angels invest in more startups on a yearly basis than venture capitalists. 
B)  The number of angel investors has decreased dramatically over the past decade. 
C)  Business angels usually take a seat on the board of directors of the firms in which they invest. 
D)  Business angels are valuable because of their willingness to make relatively small investments. 
E)  Business angels are difficult to find. 
A)  Business angels invest in more startups on a yearly basis than venture capitalists. 
B)  The number of angel investors has decreased dramatically over the past decade. 
C)  Business angels usually take a seat on the board of directors of the firms in which they invest. 
D)  Business angels are valuable because of their willingness to make relatively small investments. 
E)  Business angels are difficult to find. B

Question 4

Why do most firms need funding? Provide a brief explanation of each reason.

Accepted Answer

There are three reasons that most new fi

Question 5

According to a survey conducted by the National Small Business Association between August 2008 and December 2009, between ________ percent of business owners utilized vendor credit.

Accepted Answer

A)  12 and 18 
B)  17 and 21 
C)  22 and 29 
D)  35 and 40 
E)  52 and 58 
A)  12 and 18 
B)  17 and 21 
C)  22 and 29 
D)  35 and 40 
E)  52 and 58

Question 6

________ are limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms.

Accepted Answer

A)  Venture capital firms 
B)  Business angels 
C)  Institutional investors 
D)  Investment bankers 
E)  Business capitalists 
A)  Venture capital firms 
B)  Business angels 
C)  Institutional investors 
D)  Investment bankers 
E)  Business capitalists

Question 7

Which "phase" of the SBIR Program is intended to demonstrate the proposed innovation's technical feasibility?

Accepted Answer

A)  Phase I 
B)  Phase II 
C)  Phase III 
D)  Phase V 
E)  Phase X 
A)  Phase I 
B)  Phase II 
C)  Phase III 
D)  Phase V 
E)  Phase X

Question 8

The Partnering for Success feature in Chapter 10 focuses on TechStars and Y Combinator: A New Breed of Start-Up Incubators. TechStars is headquartered in ________ while Y Combinator is headquartered in ________.

Accepted Answer

A)  the Silicon Valley, Chicago 
B)  Boulder, CO, New York City 
C)  Austin, TX, New York City 
D)  the Silicon Valley, Austin, TX 
E)  Chicago, Boulder, CO 
A)  the Silicon Valley, Chicago 
B)  Boulder, CO, New York City 
C)  Austin, TX, New York City 
D)  the Silicon Valley, Austin, TX 
E)  Chicago, Boulder, CO

Question 9

Which of the following statements is incorrect about grant programs?

Accepted Answer

A)  Granting agencies are very visible and well-known, so it's normally not hard to find one. 
B)  The federal government has grant programs beyond the SBIR and STTR programs. 
C)  It's important to avoid grant-related scams. 
D)  There are a limited number of organizations that offer new businesses grants. 
E)  There are private foundations that grant money to both existing and startup firms. 
A)  Granting agencies are very visible and well-known, so it's normally not hard to find one. 
B)  The federal government has grant programs beyond the SBIR and STTR programs. 
C)  It's important to avoid grant-related scams. 
D)  There are a limited number of organizations that offer new businesses grants. 
E)  There are private foundations that grant money to both existing and startup firms.

Question 10

As part of drumming up support for an IPO, the investment bank typically takes the top management team of the firm wanting to go public on a ________, which is a whirlwind tour that consists of meetings in key cities where the firm presents its business plan to groups of investors.

Accepted Answer

A)  pitch show 
B)  road show 
C)  pitch tour 
D)  road trip 
E)  tornado tour 
A)  pitch show 
B)  road show 
C)  pitch tour 
D)  road trip 
E)  tornado tour

Question 11

Kimberly Jones is the founder of a company in the medical equipment industry. Kimberly's firm is still in the feasibility analysis stage and doesn't have a product that is ready to sell. The company is spending about $25,000 per month and expects to maintain that level of spending until it reaches profitability. The $25,000 a month is Kimberly's:

Accepted Answer

A)  consumption rate 
B)  utilization rate 
C)  burn rate 
D)  usage rate 
E)  liquidity rate 
A)  consumption rate 
B)  utilization rate 
C)  burn rate 
D)  usage rate 
E)  liquidity rate

Question 12

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

Accepted Answer

A)  government grants 
B)  business angels 
C)  friends and family 
D)  banks 
E)  venture capital 
A)  government grants 
B)  business angels 
C)  friends and family 
D)  banks 
E)  venture capital

Question 13

The ideal candidate for a bank loan is a firm with a strong cash flow, low leverage, audited financial statements, good management, and a healthy balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

The ________ is a competitive grant program that provides over $1 billion per year to small businesses for early-state and development projects.

Accepted Answer

A)  SBTA Program 
B)  SBIR Program 
C)  SBAP Program 
D)  SAIR Program 
E)  SBTR Program 
A)  SBTA Program 
B)  SBIR Program 
C)  SBAP Program 
D)  SAIR Program 
E)  SBTR Program

Question 15

What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

Accepted Answer

Equity funding means exchanging partial

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

Accepted Answer

A)  Factoring 
B)  Vendor credit 
C)  Peer-to-peer lending 
D)  Crowdfunding 
E)  Leasing 
A)  Factoring 
B)  Vendor credit 
C)  Peer-to-peer lending 
D)  Crowdfunding 
E)  Leasing

Question 18

The major advantage of leasing is that:

Accepted Answer

A)  it enables a company to have access to average or above average facilities and equipment 
B)  it enables a company to acquire the use of assets with little or no down payment 
C)  it is cheaper in the long run than purchasing 
D)  a lease agreement is easier to negotiate than a purchase agreement 
E)  it is easier to obtain credit on a lease than a purchase 
A)  it enables a company to have access to average or above average facilities and equipment 
B)  it enables a company to acquire the use of assets with little or no down payment 
C)  it is cheaper in the long run than purchasing 
D)  a lease agreement is easier to negotiate than a purchase agreement 
E)  it is easier to obtain credit on a lease than a purchase

Question 19

Amy Clark just opened a soup and salad restaurant near Golden Gate Park in San Francisco. Rather than borrow money or raise funds from investors, Amy used her creativity and ingenuity and figured out how to get her business up and running without the need for external funding. Amy is utilizing a technique referred to as:

Accepted Answer

A)  networking 
B)  reaching 
C)  scrounging 
D)  prospecting 
E)  bootstrapping 
A)  networking 
B)  reaching 
C)  scrounging 
D)  prospecting 
E)  bootstrapping

Question 20

The three most common forms of equity funding are:

Accepted Answer

A)  friends and family, venture capital, bank loans 
B)  SBIR grants, SBA guaranteed loans, bank loans 
C)  initial public offerings, business angels, venture capitalists 
D)  friends and family, business angels, bootstrapping 
E)  SBIR grants, venture capital, initial public offerings 
A)  friends and family, venture capital, bank loans 
B)  SBIR grants, SBA guaranteed loans, bank loans 
C)  initial public offerings, business angels, venture capitalists 
D)  friends and family, business angels, bootstrapping 
E)  SBIR grants, venture capital, initial public offerings

Venture capital firms are ________ of money managers who raise money in "funds" to invest in startups and growing firms.

Equity investors typically have a ________ investment horizon.

Which of the following statement is not correct regarding business angels?

Why do most firms need funding? Provide a brief explanation of each reason.

According to a survey conducted by the National Small Business Association between August 2008 and December 2009, between ________ percent of business owners utilized vendor credit.

________ are limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms.

Which "phase" of the SBIR Program is intended to demonstrate the proposed innovation's technical feasibility?

The Partnering for Success feature in Chapter 10 focuses on TechStars and Y Combinator: A New Breed of Start-Up Incubators. TechStars is headquartered in while Y Combinator is headquartered in .

Which of the following statements is incorrect about grant programs?

As part of drumming up support for an IPO, the investment bank typically takes the top management team of the firm wanting to go public on a ________, which is a whirlwind tour that consists of meetings in key cities where the firm presents its business plan to groups of investors.

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

The ideal candidate for a bank loan is a firm with a strong cash flow, low leverage, audited financial statements, good management, and a healthy balance sheet.

The ________ is a competitive grant program that provides over $1 billion per year to small businesses for early-state and development projects.

What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

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

________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

The major advantage of leasing is that:

The three most common forms of equity funding are:

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Assessing a New Ventures Financial Strength and Viability

Building a New Venture Team

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Exam 10: Getting Financing or Funding

Venture capital firms are ________ of money managers who raise money in "funds" to invest in startups and growing firms.

Equity investors typically have a ________ investment horizon.

Which of the following statement is not correct regarding business angels?

Why do most firms need funding? Provide a brief explanation of each reason.

According to a survey conducted by the National Small Business Association between August 2008 and December 2009, between ________ percent of business owners utilized vendor credit.

________ are limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms.

Which "phase" of the SBIR Program is intended to demonstrate the proposed innovation's technical feasibility?

The Partnering for Success feature in Chapter 10 focuses on TechStars and Y Combinator: A New Breed of Start-Up Incubators. TechStars is headquartered in ________ while Y Combinator is headquartered in ________.

Which of the following statements is incorrect about grant programs?

As part of drumming up support for an IPO, the investment bank typically takes the top management team of the firm wanting to go public on a ________, which is a whirlwind tour that consists of meetings in key cities where the firm presents its business plan to groups of investors.

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

The ideal candidate for a bank loan is a firm with a strong cash flow, low leverage, audited financial statements, good management, and a healthy balance sheet.

The ________ is a competitive grant program that provides over $1 billion per year to small businesses for early-state and development projects.

What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

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

________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

The major advantage of leasing is that:

The three most common forms of equity funding are:

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Assessing a New Ventures Financial Strength and Viability

Building a New Venture Team

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

The Partnering for Success feature in Chapter 10 focuses on TechStars and Y Combinator: A New Breed of Start-Up Incubators. TechStars is headquartered in while Y Combinator is headquartered in .