Exam 14: Sources of Equity Financing

________ are private,for-profit organizations that purchase equity positions in young businesses they believe have high-growth and high-profit potential,producing annual returns of 300 to 500 percent over five to seven years.

A typical venture capital company seeks to purchase 20 percent to 40 percent of a business.

An advantage of using friends and relatives as investors is that:

One of the biggest advantages of going public is:

If an entrepreneur is not willing to risk funds in a business venture,other potential investors and lenders are not likely to provide capital either.

The need for growth capital is created by the uneven flow of cash into and out of the business due to normal seasonal fluctuations.

Unlike entrepreneurs of the past,today's entrepreneurs:

The Internet has opened a new avenue for direct public offerings.

Venture capital companies are private,for-profit organizations that purchase equity positions in young businesses they believe have high-growth and high-profit potential,producing annual returns of 300 to 500 percent over five to seven years.

Venture capitalists look for all of the following except:

The document outlining the details of the agreement between the entrepreneur and the stock underwriter is called:

Venture capitalists look for ________ as the most important ingredient in the success of any business.

Tien is looking for capital to purchase new buildings and equipment for her small manufacturing company.Tien is looking for ________ capital.

Interstate offerings (Rule 147)is not best suited when a company is at the ________ stage.

The two factors that make a deal attractive to venture capitalists are:

Foreign stock markets offer entrepreneurs easier access to equity funds than do U.S.markets.

The money Bert uses to build inventory for the upcoming Christmas season would be classified as ________ capital.

A(n)________ is a private,for-profit organization that purchases equity positions in young businesses that will potentially produce returns of 300 to 500 percent over five to seven years.

Seed capital for the entrepreneur is risk capital for investors.

What is a "road show" and what is its purpose?