Question 1

The main difference between the SBIR and the STTR programs is that the STTR program requires the participation of ________.

Accepted Answer

A)  an attorney 
B)  a venture capitalist 
C)  researchers working at universities or other research institutions 
D)  a certified public accountant 
E)  a government agency in conducting the research 
A)  an attorney 
B)  a venture capitalist 
C)  researchers working at universities or other research institutions 
D)  a certified public accountant 
E)  a government agency in conducting the research C

Question 2

Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.

Accepted Answer

A) True 
 B)False  True

Question 3

What is meant by the term "bootstrapping"? Provide several examples of the ways that entrepreneurs bootstrap to raise money or cut costs?

Accepted Answer

Bootstrapping is the use of creativity,ingenuity,and any means possible to obtain resources other than borrowing money or raising capital from traditional sources.There are many ways entrepreneurs bootstrap to raise money or cut costs.Some of the more common examples include:
•Buy used instead of new equipment
•Coordinate purchases with other businesses
•Lease equipment rather than buying
•Obtain payments in advance from customers
•Minimize personal expenses
•Buy items cheaply,but prudently,through discount outlets or online auctions such as eBay
•Share office space or employees with other businesses
•Hire interns

Question 4

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.

Accepted Answer

A)  appropriate 
B)  fit 
C)  due 
D)  prior 
E)  responsible 
A)  appropriate 
B)  fit 
C)  due 
D)  prior 
E)  responsible

Question 5

A(n) ________ is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

Accepted Answer

A)  assurance 
B)  loan 
C)  guarantee 
D)  warranty 
E)  lease 
A)  assurance 
B)  loan 
C)  guarantee 
D)  warranty 
E)  lease

Question 6

Debt financing means exchanging partial ownership in a firm in exchange for cash.

Accepted Answer

A) True 
 B)False

Question 7

A liquidity event accomplishes which of the following purposes?

Accepted Answer

A)  Provides a business sufficient funding to operate for up to a year without raising additional funding. 
B)  Provides the founders of a firm a salary. 
C)  Converts some or all of a company's stock to cash. 
D)  Allows the founders of a firm to sell stock to the public. 
E)  Allows a business to liquidate in an ethical and cost-effective manner. 
A)  Provides a business sufficient funding to operate for up to a year without raising additional funding. 
B)  Provides the founders of a firm a salary. 
C)  Converts some or all of a company's stock to cash. 
D)  Allows the founders of a firm to sell stock to the public. 
E)  Allows a business to liquidate in an ethical and cost-effective manner.

Question 8

In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture's life to fund the development of a prototype and feasibility analysis is referred to as ________ funding.

Accepted Answer

A)  seed 
B)  second-stage 
C)  first-stage 
D)  mezzanine 
E)  startup 
A)  seed 
B)  second-stage 
C)  first-stage 
D)  mezzanine 
E)  startup

Question 9

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 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.

Accepted Answer

A)  innovation 
B)  marketing 
C)  project management 
D)  fundraising 
E)  product distribution 
A)  innovation 
B)  marketing 
C)  project management 
D)  fundraising 
E)  product distribution

Question 10

Angel investors, private placement, venture capital, and initial public offerings are the most common sources of equity funding.

Accepted Answer

A) True 
 B)False

Question 11

The Partnering for Success feature in Chapter 10 focuses on Startup Weekend. Startup Weekend is a not-for-profit organization that ________.

Accepted Answer

A)  creates a context in which small groups of people can start a business in 54 hours (usually over a weekend) 
B)  sponsors "weekend" events that connect entrepreneurs with mentors, advisors and potential investors 
C)  provides 54-hour weekend retreats for people to gather and learn as much as possible about the startup process 
D)  sponsors pitch events, usually over a weekend, that allow entrepreneurs to pitch their business ideas to angel investors 
E)  facilitates weekend business plan competitions across the United States 
A)  creates a context in which small groups of people can start a business in 54 hours (usually over a weekend) 
B)  sponsors "weekend" events that connect entrepreneurs with mentors, advisors and potential investors 
C)  provides 54-hour weekend retreats for people to gather and learn as much as possible about the startup process 
D)  sponsors pitch events, usually over a weekend, that allow entrepreneurs to pitch their business ideas to angel investors 
E)  facilitates weekend business plan competitions across the United States

Question 12

The number of angel investors in the United States has decreased dramatically over the past decade.

Accepted Answer

A) True 
 B)False

Question 13

The percentage of the profits the venture capitalist gets is called the "carry."

Accepted Answer

A) True 
 B)False

Question 14

Roominate, the company profiled in the opening feature of Chapter 10, makes toys that are intended to encourage young girls to enter engineering. The company was co-founded by Alice Brooks and Bettina Chen. Which of the following is not true about Roominate's founding story?

Accepted Answer

A)  In 2013, Brooks and Chen appeared on the Today Show to talk about Roominate. 
B)  In 2013 and 2014, Brooks and Chen attempted to raise money for angel investors, but were unable to convince any angels to invest. 
C)  Brooks and Chen raised money for Roominate via a Kickstarter campaign. 
D)  At the same time Brooks and Chen were conceiving Roominate they were taking a Lean Launchpad class at Stanford taught by Steve Blank. 
E)  Brooks and Chen met while they were engineering master's students at Stanford University. 
A)  In 2013, Brooks and Chen appeared on the Today Show to talk about Roominate. 
B)  In 2013 and 2014, Brooks and Chen attempted to raise money for angel investors, but were unable to convince any angels to invest. 
C)  Brooks and Chen raised money for Roominate via a Kickstarter campaign. 
D)  At the same time Brooks and Chen were conceiving Roominate they were taking a Lean Launchpad class at Stanford taught by Steve Blank. 
E)  Brooks and Chen met while they were engineering master's students at Stanford University.

Question 15

________ 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 16

Venture capitalists are individuals who invest their personal capital directly in startups.

Accepted Answer

A) True 
 B)False

Question 17

In startup firms, inventory must be purchased, employees must be trained and paid, and advertising must be paid for before cash is generated from sales. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

Accepted Answer

A)  Cash flow challenges 
B)  Marketing costs 
C)  Personnel costs 
D)  Capital investments 
E)  Lengthy product development cycles 
A)  Cash flow challenges 
B)  Marketing costs 
C)  Personnel costs 
D)  Capital investments 
E)  Lengthy product development cycles

Question 18

Historically, commercial banks ________.

Accepted Answer

A)  have been a good source of funds for startup firms 
B)  have not funded startup firms at all 
C)  have been a good source of funds for manufacturing firm startups but not for service firm startups 
D)  have been a good source of funds for service firm startups but not for manufacturing firm startups 
E)  have not been a good source of funds for startup firms 
A)  have been a good source of funds for startup firms 
B)  have not funded startup firms at all 
C)  have been a good source of funds for manufacturing firm startups but not for service firm startups 
D)  have been a good source of funds for service firm startups but not for manufacturing firm startups 
E)  have not been a good source of funds for startup firms

Question 19

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

Question 20

FundersClub and Crowdfunder.com are examples of ________-based crowdfunding sites.

Accepted Answer

A)  debt 
B)  reward 
C)  government 
D)  equity 
E)  industry 
A)  debt 
B)  reward 
C)  government 
D)  equity 
E)  industry

The main difference between the SBIR and the STTR programs is that the STTR program requires the participation of ________.

Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.

What is meant by the term "bootstrapping"? Provide several examples of the ways that entrepreneurs bootstrap to raise money or cut costs?

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.

A(n) ________ is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

Debt financing means exchanging partial ownership in a firm in exchange for cash.

A liquidity event accomplishes which of the following purposes?

In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture's life to fund the development of a prototype and feasibility analysis is referred to as ________ funding.

Angel investors, private placement, venture capital, and initial public offerings are the most common sources of equity funding.

The Partnering for Success feature in Chapter 10 focuses on Startup Weekend. Startup Weekend is a not-for-profit organization that ________.

The number of angel investors in the United States has decreased dramatically over the past decade.

The percentage of the profits the venture capitalist gets is called the "carry."

Roominate, the company profiled in the opening feature of Chapter 10, makes toys that are intended to encourage young girls to enter engineering. The company was co-founded by Alice Brooks and Bettina Chen. Which of the following is not true about Roominate's founding story?

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

Venture capitalists are individuals who invest their personal capital directly in startups.

In startup firms, inventory must be purchased, employees must be trained and paid, and advertising must be paid for before cash is generated from sales. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

Historically, commercial banks ________.

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

FundersClub and Crowdfunder.com are examples of ________-based crowdfunding sites.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's 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

The main difference between the SBIR and the STTR programs is that the STTR program requires the participation of ________.

Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.

What is meant by the term "bootstrapping"? Provide several examples of the ways that entrepreneurs bootstrap to raise money or cut costs?

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.

A(n) ________ is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

Debt financing means exchanging partial ownership in a firm in exchange for cash.

A liquidity event accomplishes which of the following purposes?

In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture's life to fund the development of a prototype and feasibility analysis is referred to as ________ funding.

Angel investors, private placement, venture capital, and initial public offerings are the most common sources of equity funding.

The Partnering for Success feature in Chapter 10 focuses on Startup Weekend. Startup Weekend is a not-for-profit organization that ________.

The number of angel investors in the United States has decreased dramatically over the past decade.

The percentage of the profits the venture capitalist gets is called the "carry."

Roominate, the company profiled in the opening feature of Chapter 10, makes toys that are intended to encourage young girls to enter engineering. The company was co-founded by Alice Brooks and Bettina Chen. Which of the following is not true about Roominate's founding story?

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

Venture capitalists are individuals who invest their personal capital directly in startups.

In startup firms, inventory must be purchased, employees must be trained and paid, and advertising must be paid for before cash is generated from sales. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

Historically, commercial banks ________.

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

FundersClub and Crowdfunder.com are examples of ________-based crowdfunding sites.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's 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