Question 1

Most established R&D limited partnerships:

Accepted Answer

A) allow a minimum amount of equity dilution. 
B) are successful. 
C) increase,to some extent,the risks involved in the venture. 
D) have weak financial statements due to lack of outside capital. 
A) allow a minimum amount of equity dilution. 
B) are successful. 
C) increase,to some extent,the risks involved in the venture. 
D) have weak financial statements due to lack of outside capital. A

Question 2

When borrowing from friends and family,the entrepreneur should avoid putting agreements in writing to avoid future disagreements.

Accepted Answer

A) True 
 B)False  False

Question 3

When inventory is the asset base for a loan:

Accepted Answer

A) a trust receipt is not generally used. 
B) factoring may be arranged. 
C) about 50 percent of it can be financed. 
D) all of the inventory can be financeD. 
A) a trust receipt is not generally used. 
B) factoring may be arranged. 
C) about 50 percent of it can be financed. 
D) all of the inventory can be financeD. C

Question 4

In ____ the entrepreneur sells equipment to the lender then arranges for its continued use.

Accepted Answer

A) a factoring arrangement 
B) trust receipts 
C) cash flow financing 
D) a sale-leaseback arrangement 
A) a factoring arrangement 
B) trust receipts 
C) cash flow financing 
D) a sale-leaseback arrangement

Question 5

All owners of ____ or more are required to personally guarantee an SBA loan.

Accepted Answer

A) 20% 
B) 30% 
C) 35% 
D) 40% 
A) 20% 
B) 30% 
C) 35% 
D) 40%

Question 6

External investors generally require the entrepreneur to commit a large percentage of his or her personal assets.

Accepted Answer

A) True 
 B)False

Question 7

The most frequently used source of short-term funds when collateral is available is:

Accepted Answer

A) SBA Microloans. 
B) SBA 7(a)loans. 
C) R&D limited partnerships. 
D) commercial bank loans. 
A) SBA Microloans. 
B) SBA 7(a)loans. 
C) R&D limited partnerships. 
D) commercial bank loans.

Question 8

Most R&D limited partnerships are not successful.

Accepted Answer

A) True 
 B)False

Question 9

Under Rule 504 of Regulation D,a company can sell up to $1,000,000 of securities to any number of investors,regardless of their sophistication,in any 12-month period.

Accepted Answer

A) True 
 B)False

Question 10

What type of cash flow financing loan can make funds available for up to 10 years?

Accepted Answer

A) Character loans 
B) Real estate loans 
C) Long-term loans 
D) Installment loans 
A) Character loans 
B) Real estate loans 
C) Long-term loans 
D) Installment loans

Question 11

Research and development limited partnerships provide small businesses funds from investors looking for tax shelters.

Accepted Answer

A) True 
 B)False

Question 12

Explain what problems an entrepreneur might avoid by using bootstrap financing instead of outside capital.
A.Outside capital takes between 3-6 months to raise,if it can be raised at all.This process distracts the entrepreneur from other important activities.
B.Outside capital often decreases a firm's drive for sales and profits.
C.The availability of capital increases the impulse to spend.It can cause a company to hire more staff before they are needed and to move into more costly facilities.
D.Outside capital can decrease the company's flexibility.This can hamper the direction,drive,and creativity of the entrepreneur.
E.Outside capital may cause disruption and problems in the venturE.Capital is not provided without the expectation of a return,sometimes before the business should be giving onE.This emphasis on short-term performance can be at the expense of the long-term success of the company.

Accepted Answer

An entrepreneur can avoid several proble

Question 13

The funds for a SBA guaranteed loan are provided by the federal government.

Accepted Answer

A) True 
 B)False

Question 14

Obtaining funds from private investors:

Accepted Answer

A) is inappropriate for new ventures. 
B) is a public offering. 
C) is covered by Regulation D. 
D) involves a great deal of time and expense. 
A) is inappropriate for new ventures. 
B) is a public offering. 
C) is covered by Regulation D. 
D) involves a great deal of time and expense.

Question 15

Private offerings involve more time,expense,and paperwork than public offerings.

Accepted Answer

A) True 
 B)False

Question 16

Research and development limited partnerships provide funds for entrepreneurs in high-tech fields through:

Accepted Answer

A) debt from lenders. 
B) equity from present owners. 
C) investors looking for tax shelters. 
D) cash from internal operations. 
A) debt from lenders. 
B) equity from present owners. 
C) investors looking for tax shelters. 
D) cash from internal operations.

Question 17

The personal funds of the entrepreneur are the most expensive.

Accepted Answer

A) True 
 B)False

Question 18

SBA 7(a)loans can be used for such things as equipment and land.

Accepted Answer

A) True 
 B)False

Question 19

Rule 506 goes one step further than Rule 505 by allowing an issuing company to sell an unlimited number of securities to 35 investors and an unlimited number of accredited investors and relatives of issuers.

Accepted Answer

A) True 
 B)False

Question 20

When using equity financing from family and friends:

Accepted Answer

A) business arrangements should be in good faith. 
B) details such as terms of the investment and rights of the investor need not be in writing. 
C) they can be more patient than other investors in when they expect a return on investment. 
D) since the amount of money is usually small,they do have an ownership position in the venture. 
A) business arrangements should be in good faith. 
B) details such as terms of the investment and rights of the investor need not be in writing. 
C) they can be more patient than other investors in when they expect a return on investment. 
D) since the amount of money is usually small,they do have an ownership position in the venture.

Most established R&D limited partnerships:

When borrowing from friends and family,the entrepreneur should avoid putting agreements in writing to avoid future disagreements.

When inventory is the asset base for a loan:

In ____ the entrepreneur sells equipment to the lender then arranges for its continued use.

All owners of ____ or more are required to personally guarantee an SBA loan.

External investors generally require the entrepreneur to commit a large percentage of his or her personal assets.

The most frequently used source of short-term funds when collateral is available is:

Most R&D limited partnerships are not successful.

Under Rule 504 of Regulation D,a company can sell up to $1,000,000 of securities to any number of investors,regardless of their sophistication,in any 12-month period.

What type of cash flow financing loan can make funds available for up to 10 years?

Research and development limited partnerships provide small businesses funds from investors looking for tax shelters.

The funds for a SBA guaranteed loan are provided by the federal government.

Obtaining funds from private investors:

Private offerings involve more time,expense,and paperwork than public offerings.

Research and development limited partnerships provide funds for entrepreneurs in high-tech fields through:

The personal funds of the entrepreneur are the most expensive.

SBA 7(a)loans can be used for such things as equipment and land.

Rule 506 goes one step further than Rule 505 by allowing an issuing company to sell an unlimited number of securities to 35 investors and an unlimited number of accredited investors and relatives of issuers.

When using equity financing from family and friends:

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

Informal Risk Capital, Venture Capital, and Going Public

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 11: Sources of Capital

Most established R&D limited partnerships:

When borrowing from friends and family,the entrepreneur should avoid putting agreements in writing to avoid future disagreements.

When inventory is the asset base for a loan:

In ____ the entrepreneur sells equipment to the lender then arranges for its continued use.

All owners of ____ or more are required to personally guarantee an SBA loan.

External investors generally require the entrepreneur to commit a large percentage of his or her personal assets.

The most frequently used source of short-term funds when collateral is available is:

Most R&D limited partnerships are not successful.

Under Rule 504 of Regulation D,a company can sell up to $1,000,000 of securities to any number of investors,regardless of their sophistication,in any 12-month period.

What type of cash flow financing loan can make funds available for up to 10 years?

Research and development limited partnerships provide small businesses funds from investors looking for tax shelters.

The funds for a SBA guaranteed loan are provided by the federal government.

Obtaining funds from private investors:

Private offerings involve more time,expense,and paperwork than public offerings.

Research and development limited partnerships provide funds for entrepreneurs in high-tech fields through:

The personal funds of the entrepreneur are the most expensive.

SBA 7(a)loans can be used for such things as equipment and land.

Rule 506 goes one step further than Rule 505 by allowing an issuing company to sell an unlimited number of securities to 35 investors and an unlimited number of accredited investors and relatives of issuers.

When using equity financing from family and friends:

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

Informal Risk Capital, Venture Capital, and Going Public

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