Question 1

Unlike entrepreneurs of the past, today's entrepreneurs:

Accepted Answer

A)  are finding more government interest and funding for business start-ups than in the past decade. 
B)  find fewer closed doors as small business start-ups have become less risky. 
C)  have to piece their capital together from several sources. 
D)  are spending a smaller percentage of their time raising capital for their businesses. 
A)  are finding more government interest and funding for business start-ups than in the past decade. 
B)  find fewer closed doors as small business start-ups have become less risky. 
C)  have to piece their capital together from several sources. 
D)  are spending a smaller percentage of their time raising capital for their businesses.

Question 2

Equity capital represents the personal investment of the owner (or owners) in a business and is sometimes called ________ because of the potential outcome.

Accepted Answer

A)  debt capital 
B)  opportunity capital 
C)  risk capital 
D)  layered financing 
A)  debt capital 
B)  opportunity capital 
C)  risk capital 
D)  layered financing

Question 3

Venture capital companies are an important source of equity funding for small businesses. Discuss their policies, ownership control, and investment preferences regarding funding small businesses.

Accepted Answer

Venture capital companies are for-profit

Question 4

Explain the differences in the lending practices of commercial banks, commercial finance companies, and savings and loans associations.

Accepted Answer

• Commercial banks-provide the greatest

Question 5

A company pledging its inventory, accounts receivables, or fixtures as collateral for a loan is using:

Accepted Answer

A)  floor planning. 
B)  asset-based financing. 
C)  trade credit. 
D)  margin loan. 
A)  floor planning. 
B)  asset-based financing. 
C)  trade credit. 
D)  margin loan.

Question 6

A(n) ________ is when a company raises capital by selling shares of its stock to the general public for the first time.

Accepted Answer

A)  venture capital offering 
B)  partnership 
C)  debt equity arrangement 
D)  initial public offering 
A)  venture capital offering 
B)  partnership 
C)  debt equity arrangement 
D)  initial public offering

Question 7

One of the disadvantages of angels is that they are typically not willing to wait more than three years to cash out their investments.

Accepted Answer

A) True 
 B)False

Question 8

Entrepreneurs are most likely to give up more equity in their businesses in the startup phase than in any other.

Accepted Answer

A) True 
 B)False

Question 9

One of the easiest and most common methods of debt capital available is:

Accepted Answer

A)  bootstrap financing. 
B)  leasing. 
C)  credit cards. 
D)  revolving loan fund . 
A)  bootstrap financing. 
B)  leasing. 
C)  credit cards. 
D)  revolving loan fund .

Question 10

Savings and loan associations specialize in loans for the purchase of inventory and for working capital.

Accepted Answer

A) True 
 B)False

Question 11

When evaluating a company as a potential investment target, venture capitalists look for all but which of the following?

Accepted Answer

A)  A competent management team 
B)  Potential for high returns 
C)  Convenient and profitable exit strategy 
D)  Stable industry 
A)  A competent management team 
B)  Potential for high returns 
C)  Convenient and profitable exit strategy 
D)  Stable industry

Question 12

The goal of regulation S-B and S-K's simplified registration process is to make it easier for small companies to go public by cutting the paperwork and the costs of raising capital.

Accepted Answer

A) True 
 B)False

Question 13

An option for acquiring equity capital is for the entrepreneur to take on partner(s); however, it is important that he consider the impact of giving up some personal control over operations and of sharing profits with others.

Accepted Answer

A) True 
 B)False

Question 14

Private investors look to earn the return on their investments in a business through the increased value of the business, not through dividends and interest.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not an asset-based financing technique?

Accepted Answer

A)  Discounting accounts receivable 
B)  Inventory financing 
C)  Term loan 
D)  None of the above 
A)  Discounting accounts receivable 
B)  Inventory financing 
C)  Term loan 
D)  None of the above

Question 16

In startup companies, raising capital can easily consume as much as one-half of the entrepreneur's time and take many months to complete.

Accepted Answer

A) True 
 B)False

Question 17

The Community Advantage Loan Program provides loans to communities that have suffered a natural disaster.

Accepted Answer

A) True 
 B)False

Question 18

Commercial banks provide ________ of loans to small business.

Accepted Answer

A)  very few 
B)  about 50 percent 
C)  the greatest number and variety 
D)  more than 89 percent 
A)  very few 
B)  about 50 percent 
C)  the greatest number and variety 
D)  more than 89 percent

Question 19

Which of the following is not a characteristic of a typical angel investor?

Accepted Answer

A)  Investing money locally 
B)  Purchasing majority ownership in the company 
C)  Investing in the startup phase of the company 
D)  Willing to wait seven years or more to cash out an investment 
A)  Investing money locally 
B)  Purchasing majority ownership in the company 
C)  Investing in the startup phase of the company 
D)  Willing to wait seven years or more to cash out an investment

Question 20

Malcolm wants to start a business in the prosperous little town of Grove City, a rural town of 10,000 about 65 miles from Pittsburgh, Pennsylvania. His business will create 25 manufacturing jobs. What federal agency would most likely be interested in guaranteeing a bank loan for Malcolm?

Accepted Answer

A)  The Department of Housing and Urban Development 
B)  A local development company 
C)  U.S. Department of Agriculture's Rural Business Co-op Service 
D)  The Economic Development Administration 
A)  The Department of Housing and Urban Development 
B)  A local development company 
C)  U.S. Department of Agriculture's Rural Business Co-op Service 
D)  The Economic Development Administration

Unlike entrepreneurs of the past, today's entrepreneurs:

Equity capital represents the personal investment of the owner (or owners) in a business and is sometimes called ________ because of the potential outcome.

Venture capital companies are an important source of equity funding for small businesses. Discuss their policies, ownership control, and investment preferences regarding funding small businesses.

Explain the differences in the lending practices of commercial banks, commercial finance companies, and savings and loans associations.

A company pledging its inventory, accounts receivables, or fixtures as collateral for a loan is using:

A(n) ________ is when a company raises capital by selling shares of its stock to the general public for the first time.

One of the disadvantages of angels is that they are typically not willing to wait more than three years to cash out their investments.

Entrepreneurs are most likely to give up more equity in their businesses in the startup phase than in any other.

One of the easiest and most common methods of debt capital available is:

Savings and loan associations specialize in loans for the purchase of inventory and for working capital.

When evaluating a company as a potential investment target, venture capitalists look for all but which of the following?

The goal of regulation S-B and S-K's simplified registration process is to make it easier for small companies to go public by cutting the paperwork and the costs of raising capital.

An option for acquiring equity capital is for the entrepreneur to take on partner(s); however, it is important that he consider the impact of giving up some personal control over operations and of sharing profits with others.

Private investors look to earn the return on their investments in a business through the increased value of the business, not through dividends and interest.

Which of the following is not an asset-based financing technique?

In startup companies, raising capital can easily consume as much as one-half of the entrepreneur's time and take many months to complete.

The Community Advantage Loan Program provides loans to communities that have suffered a natural disaster.

Commercial banks provide ________ of loans to small business.

Which of the following is not a characteristic of a typical angel investor?

Malcolm wants to start a business in the prosperous little town of Grove City, a rural town of 10,000 about 65 miles from Pittsburgh, Pennsylvania. His business will create 25 manufacturing jobs. What federal agency would most likely be interested in guaranteeing a bank loan for Malcolm?

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Forms of Business Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Creating a Successful Financial Plan

Managing Cash Flow

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

Filters

Exam 13: Sources of Financing: Debt and Equity

Unlike entrepreneurs of the past, today's entrepreneurs:

Equity capital represents the personal investment of the owner (or owners) in a business and is sometimes called ________ because of the potential outcome.

Venture capital companies are an important source of equity funding for small businesses. Discuss their policies, ownership control, and investment preferences regarding funding small businesses.

Explain the differences in the lending practices of commercial banks, commercial finance companies, and savings and loans associations.

A company pledging its inventory, accounts receivables, or fixtures as collateral for a loan is using:

A(n) ________ is when a company raises capital by selling shares of its stock to the general public for the first time.

One of the disadvantages of angels is that they are typically not willing to wait more than three years to cash out their investments.

Entrepreneurs are most likely to give up more equity in their businesses in the startup phase than in any other.

One of the easiest and most common methods of debt capital available is:

Savings and loan associations specialize in loans for the purchase of inventory and for working capital.

When evaluating a company as a potential investment target, venture capitalists look for all but which of the following?

The goal of regulation S-B and S-K's simplified registration process is to make it easier for small companies to go public by cutting the paperwork and the costs of raising capital.

An option for acquiring equity capital is for the entrepreneur to take on partner(s); however, it is important that he consider the impact of giving up some personal control over operations and of sharing profits with others.

Private investors look to earn the return on their investments in a business through the increased value of the business, not through dividends and interest.

Which of the following is not an asset-based financing technique?

In startup companies, raising capital can easily consume as much as one-half of the entrepreneur's time and take many months to complete.

The Community Advantage Loan Program provides loans to communities that have suffered a natural disaster.

Commercial banks provide ________ of loans to small business.

Which of the following is not a characteristic of a typical angel investor?

Malcolm wants to start a business in the prosperous little town of Grove City, a rural town of 10,000 about 65 miles from Pittsburgh, Pennsylvania. His business will create 25 manufacturing jobs. What federal agency would most likely be interested in guaranteeing a bank loan for Malcolm?

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Forms of Business Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Creating a Successful Financial Plan

Managing Cash Flow

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

Filters