Question 1

In a private venture capital firm,the _______ manages the fund in exchange for a management fee and a percentage of profits.

Accepted Answer

A) limited partner 
B) general partner 
C) entrepreneur 
D) referral source 
A) limited partner 
B) general partner 
C) entrepreneur 
D) referral source B

Question 2

Venture capitalists tend to avoid investment proposals that are referred from lawyers and accountants.

Accepted Answer

A) True 
 B)False  False

Question 3

The factor approach:

Accepted Answer

A) uses the net tangible asset value in valuation. 
B) is used only for insurance purposes. 
C) uses earnings,dividend capacity,and book value. 
D) assesses the comparable publicly held companies to determine the company's worth. 
A) uses the net tangible asset value in valuation. 
B) is used only for insurance purposes. 
C) uses earnings,dividend capacity,and book value. 
D) assesses the comparable publicly held companies to determine the company's worth. C

Question 4

The informal investment market contains the smallest pool of risk capital in the U.S.

Accepted Answer

A) True 
 B)False

Question 5

The debt ratio is calculated by dividing total liabilities by total inventory.

Accepted Answer

A) True 
 B)False

Question 6

Angel investors have a longer investment horizon than venture capitalists do.

Accepted Answer

A) True 
 B)False

Question 7

The future earnings capacity of the company is the most important factor in valuation.

Accepted Answer

A) True 
 B)False

Question 8

A business angel's investment time horizon is usually:

Accepted Answer

A) 1-2 years. 
B) 3-4 years. 
C) 5-6 years. 
D) 7-10 years. 
A) 1-2 years. 
B) 3-4 years. 
C) 5-6 years. 
D) 7-10 years.

Question 9

Blue-sky laws may speed up the process and lessen costs to the company going public.

Accepted Answer

A) True 
 B)False

Question 10

Identify the main advantages and disadvantages of going public.
A.Advantages - ability to obtain equity capital,enhanced ability to borrow,enhanced ability to raise equity,liquidity and valuation,prestige,personal wealth.
B.Disadvantages - Increased risk of liability,expense,regulation of corporate governance policies and procedures,disclosure of information,pressures to maintain growth pattern,loss of control.

Accepted Answer

The main advantages of going public incl

Question 11

Venture capitalists:

Accepted Answer

A) usually don't know one another. 
B) tend to put more time and effort into business plans that were referred to them. 
C) tend to invest in any area that has a good rate of return. 
D) like entrepreneurs to bring in an accountant to verify financials. 
A) usually don't know one another. 
B) tend to put more time and effort into business plans that were referred to them. 
C) tend to invest in any area that has a good rate of return. 
D) like entrepreneurs to bring in an accountant to verify financials.

Question 12

Angel investors usually expect to play an active role in the businesses they invest in.

Accepted Answer

A) True 
 B)False

Question 13

________ were authorized in 1958 to marry private capital and government funds for investment in small companies.

Accepted Answer

A) Research and development limited partnerships 
B) State-sponsored venture-capital funds 
C) Small business investment companies (SBICs) 
D) Computerized entrepreneur-investor matching systems 
A) Research and development limited partnerships 
B) State-sponsored venture-capital funds 
C) Small business investment companies (SBICs) 
D) Computerized entrepreneur-investor matching systems

Question 14

Which of the following was not one of the top industries where venture capital was invested in 2011?

Accepted Answer

A) Software 
B) Biotechnology 
C) Industrial/energy 
D) Telecommunications 
A) Software 
B) Biotechnology 
C) Industrial/energy 
D) Telecommunications

Question 15

Venture capital firms are pools of equity managed by large corporations.

Accepted Answer

A) True 
 B)False

Question 16

The least liquid current asset,_____,is eliminated when calculating the acid test ratio.

Accepted Answer

A) cash 
B) accounts receivable 
C) inventory 
D) land 
A) cash 
B) accounts receivable 
C) inventory 
D) land

Question 17

The ____ is calculated by dividing accounts receivable by average daily sales.

Accepted Answer

A) current ratio 
B) average collection period 
C) debt ratio 
D) return on investment 
A) current ratio 
B) average collection period 
C) debt ratio 
D) return on investment

Question 18

Venture capital firms generally prefer a minimum funding level of $100,000.

Accepted Answer

A) True 
 B)False

Question 19

In order to increase their chances for success,an entrepreneur should approach all possible venture capital firms with proposals.

Accepted Answer

A) True 
 B)False

Question 20

In the valuation of Internet companies:

Accepted Answer

A) the book value approach is of primary importance. 
B) the replacement value approach plays a significant role. 
C) the qualitative portion of due diligence carries much more weight. 
D) the factor approach is used the overall value. 
A) the book value approach is of primary importance. 
B) the replacement value approach plays a significant role. 
C) the qualitative portion of due diligence carries much more weight. 
D) the factor approach is used the overall value.

In a private venture capital firm,the _______ manages the fund in exchange for a management fee and a percentage of profits.

Venture capitalists tend to avoid investment proposals that are referred from lawyers and accountants.

The factor approach:

The informal investment market contains the smallest pool of risk capital in the U.S.

The debt ratio is calculated by dividing total liabilities by total inventory.

Angel investors have a longer investment horizon than venture capitalists do.

The future earnings capacity of the company is the most important factor in valuation.

A business angel's investment time horizon is usually:

Blue-sky laws may speed up the process and lessen costs to the company going public.

Venture capitalists:

Angel investors usually expect to play an active role in the businesses they invest in.

________ were authorized in 1958 to marry private capital and government funds for investment in small companies.

Which of the following was not one of the top industries where venture capital was invested in 2011?

Venture capital firms are pools of equity managed by large corporations.

The least liquid current asset,_____,is eliminated when calculating the acid test ratio.

The ____ is calculated by dividing accounts receivable by average daily sales.

Venture capital firms generally prefer a minimum funding level of $100,000.

In order to increase their chances for success,an entrepreneur should approach all possible venture capital firms with proposals.

In the valuation of Internet companies:

Entrepreneurship and the Entrepreneurial Mind-Set

Entrepreneurial Intentions and Corporate Entrepreneurship

Entrepreneurial Strategy: Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Intellectual Property and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

The Financial Plan

Sources of Capital

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters

Exam 12: Informal Risk Capital, Venture Capital, and Going Public

In a private venture capital firm,the _______ manages the fund in exchange for a management fee and a percentage of profits.

Venture capitalists tend to avoid investment proposals that are referred from lawyers and accountants.

The factor approach:

The informal investment market contains the smallest pool of risk capital in the U.S.

The debt ratio is calculated by dividing total liabilities by total inventory.

Angel investors have a longer investment horizon than venture capitalists do.

The future earnings capacity of the company is the most important factor in valuation.

A business angel's investment time horizon is usually:

Blue-sky laws may speed up the process and lessen costs to the company going public.

Venture capitalists:

Angel investors usually expect to play an active role in the businesses they invest in.

________ were authorized in 1958 to marry private capital and government funds for investment in small companies.

Which of the following was not one of the top industries where venture capital was invested in 2011?

Venture capital firms are pools of equity managed by large corporations.

The least liquid current asset,_____,is eliminated when calculating the acid test ratio.

The ____ is calculated by dividing accounts receivable by average daily sales.

Venture capital firms generally prefer a minimum funding level of $100,000.

In order to increase their chances for success,an entrepreneur should approach all possible venture capital firms with proposals.

In the valuation of Internet companies:

Entrepreneurship and the Entrepreneurial Mind-Set

Entrepreneurial Intentions and Corporate Entrepreneurship

Entrepreneurial Strategy: Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Intellectual Property and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

The Financial Plan

Sources of Capital

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters