Question 1

What is a sales cycle?

Accepted Answer

A)  Time from exposure to the customer to the customer order 
B)  The time period of scaling operations 
C)  The time period to maximize profits 
D)  The first two years of your venture 
A)  Time from exposure to the customer to the customer order 
B)  The time period of scaling operations 
C)  The time period to maximize profits 
D)  The first two years of your venture A

Question 2

Using your term project venture, demonstrate your understanding of what constitutes a granular projection of revenue. What are the components of projecting revenues for your venture,
e.g. the key variables? If you have both product as well as services, how do the dynamics of revenue generation change for each type of revenue?

Accepted Answer

For my term project venture, which is a software development company, a granular projection of revenue involves breaking down the sources of revenue into specific components and variables. The key components of projecting revenues for my venture include:

1. Product sales: This includes the revenue generated from selling our software products to customers. Key variables for projecting product sales revenue include the pricing strategy, sales volume, and potential market share.

2. Service fees: In addition to selling products, our company also offers consulting and customization services to clients. The key variables for projecting service fees revenue include the hourly rates for consulting services, the number of projects, and the duration of each project.

3. Subscription model: We also offer a subscription-based model for our software products, which involves recurring revenue from customers. Key variables for projecting subscription revenue include customer retention rates, subscription pricing, and the growth of our customer base.

4. Maintenance and support contracts: Our company provides ongoing maintenance and support services for our software products, which also contribute to our revenue. Key variables for projecting maintenance and support revenue include contract renewal rates, service level agreements, and the number of clients requiring support.

The dynamics of revenue generation differ for product sales and services. Product sales revenue is typically more variable and dependent on factors such as market demand, competition, and product development cycles. On the other hand, service revenue is often more stable and predictable, as it is based on ongoing client relationships and the delivery of specific services.

In conclusion, a granular projection of revenue for my venture involves considering the specific components and variables that contribute to overall revenue. By understanding the dynamics of revenue generation for both products and services, we can develop more accurate and comprehensive revenue projections to guide our business strategy.

Question 3

What is NOT a good way to shorten the cash conversion cycle?

Accepted Answer

A)  Pre-payment from customers 
B)  Offer discounts for timely payment 
C)  Use a debt collection agency 
D)  Hire a bounty hunter 
A)  Pre-payment from customers 
B)  Offer discounts for timely payment 
C)  Use a debt collection agency 
D)  Hire a bounty hunter D

Question 4

Unlike the P&L and Cash Flow Statement the ________ can be kept to year-end figures for the purposes of startup business planning.

Accepted Answer

A)  Startup Costs 
B)  EBIT 
C)  Income Statement 
D)  Balance Sheet 
A)  Startup Costs 
B)  EBIT 
C)  Income Statement 
D)  Balance Sheet

Question 5

Capital Investments include:

Accepted Answer

A)  Land and buildings 
B)  Vehicles and industrial equipment 
C)  Investment rounds from Venture Capitalists 
D)  Friends & Family Rounds and Angel Investment Rounds 
A)  Land and buildings 
B)  Vehicles and industrial equipment 
C)  Investment rounds from Venture Capitalists 
D)  Friends & Family Rounds and Angel Investment Rounds

Question 6

What would not be a critical item on the P&L?

Accepted Answer

A)  Cost of goods 
B)  Operating profit margin 
C)  Sales growth 
D)  Inventory 
A)  Cost of goods 
B)  Operating profit margin 
C)  Sales growth 
D)  Inventory

Question 7

What is NOT a smart way to improve a company cash position?

Accepted Answer

A)  Collect prepayments from customers 
B)  Reduce inventory to just what you need for immediate production 
C)  Try to replace capital purchase with leases or rentals 
D)  Prepaying expenses 
A)  Collect prepayments from customers 
B)  Reduce inventory to just what you need for immediate production 
C)  Try to replace capital purchase with leases or rentals 
D)  Prepaying expenses

Question 8

Which is NOT one of the assumptions driving a new venture's revenue model?

Accepted Answer

A)  The close rate for first use 
B)  The repeat or continued usage by customers 
C)  The sales cycle to close each customer 
D)  All of the above are assumptions 
A)  The close rate for first use 
B)  The repeat or continued usage by customers 
C)  The sales cycle to close each customer 
D)  All of the above are assumptions

Question 9

If your _________ shows a large lag between when sales are booked and revenue is collected you may want to restructure how you collect payments.

Accepted Answer

A)  Cashflow 
B)  P&L 
C)  Balance Sheet 
D)  Business Plan 
A)  Cashflow 
B)  P&L 
C)  Balance Sheet 
D)  Business Plan

Question 10

Facebook went public at over $35 a share for about a $100 billion market capitalization. Over the next three months, the stock price dropped in half. As a company that makes its money through advertizing on the Web, what is a key variable in Facebook's revenue model that worries investors and which is driving the stock price down? What is another key variable that is Facebook's hope for getting back to its IPO price and beyond?

Accepted Answer

a) The advertizing rate per 1000 unique

Question 11

Which of the following is a difficult and nasty issue that can ensnarl the inexperienced entrepreneur even after they have made a sale to a customer?

Accepted Answer

A)  Number of competitors 
B)  Bank financing 
C)  Revenue recognition 
D)  Strategic timing 
A)  Number of competitors 
B)  Bank financing 
C)  Revenue recognition 
D)  Strategic timing

Question 12

Which of the following is NOT a financial goalpost for a new venture?

Accepted Answer

A)  The time to first dollar 
B)  The time to first profit 
C)  Potential evaluation for exit 
D)  All of the above are financial goalposts 
A)  The time to first dollar 
B)  The time to first profit 
C)  Potential evaluation for exit 
D)  All of the above are financial goalposts

Question 13

Which of the following is NOT a key deliverable in the financial projections of a new venture?

Accepted Answer

A)  A five-year projected P&L 
B)  A five-year projection of cash flow 
C)  A five-year projected balance sheet 
D)  None of the above 
A)  A five-year projected P&L 
B)  A five-year projection of cash flow 
C)  A five-year projected balance sheet 
D)  None of the above

Question 14

How do investors generally estimate an exit valuation for a startup technology venture?

Accepted Answer

A)  They add up all the sales over the course of five years, and that is the number. 
B)  They add up all the profits over the course of five years, and that is the number. 
C)  They look at the predicted balance sheet at year five and use the projected book value of the business as the number. 
D)  They look at projected revenues at the end of year five and apply and industry standard multiple to that number based on recent mergers and acquisitions. Then they study the business financials to make sure the business model can generate operating profit. 
A)  They add up all the sales over the course of five years, and that is the number. 
B)  They add up all the profits over the course of five years, and that is the number. 
C)  They look at the predicted balance sheet at year five and use the projected book value of the business as the number. 
D)  They look at projected revenues at the end of year five and apply and industry standard multiple to that number based on recent mergers and acquisitions. Then they study the business financials to make sure the business model can generate operating profit.

Question 15

Which of the following statements is true with regard to a venture spending money?

Accepted Answer

A)  Retaining good legal counsel is money well spent in a new venture 
B)  Spending money on a well-regarded accounting firm is money well-spent 
C)  A good PR firm can get a new venture visibility 
D)  All of the above statements are true 
A)  Retaining good legal counsel is money well spent in a new venture 
B)  Spending money on a well-regarded accounting firm is money well-spent 
C)  A good PR firm can get a new venture visibility 
D)  All of the above statements are true

Question 16

Which of the following is a way to shorten the sales cycle for complex B2B products?

Accepted Answer

A)  Mitigate the risk by starting with a small implementation 
B)  Sell up the organization 
C)  Create a win-win for the customer 
D)  All of the above can shorten the sales cycle 
A)  Mitigate the risk by starting with a small implementation 
B)  Sell up the organization 
C)  Create a win-win for the customer 
D)  All of the above can shorten the sales cycle

Question 17

Which of the following is considered a long-standing mantra of entrepreneurs?

Accepted Answer

A)  It is always easy to replace a customer 
B)  Cash is king 
C)  Revenue is everything 
D)  Don't worry about expenses 
A)  It is always easy to replace a customer 
B)  Cash is king 
C)  Revenue is everything 
D)  Don't worry about expenses

Question 18

Many experts in the field advocate this approach for projecting revenue for a new startup?

Accepted Answer

A)  A top-down approach 
B)  A bottoms-up approach 
C)  A lateral approach 
D)  A financial template 
A)  A top-down approach 
B)  A bottoms-up approach 
C)  A lateral approach 
D)  A financial template

Question 19

Which of the following would be a standard line item in a P&L?

Accepted Answer

A)  Net sales 
B)  The cost of goods 
C)  Net income 
D)  All of the above 
A)  Net sales 
B)  The cost of goods 
C)  Net income 
D)  All of the above

Question 20

Why are monthly financial projections important for investors?

Accepted Answer

A)  Because they show when you plan to realize your first revenue 
B)  Because investors want to see the financial conversion cycle 
C)  Because investors want to see your volume at roll-out 
D)  None of the above 
A)  Because they show when you plan to realize your first revenue 
B)  Because investors want to see the financial conversion cycle 
C)  Because investors want to see your volume at roll-out 
D)  None of the above

What is a sales cycle?

What is NOT a good way to shorten the cash conversion cycle?

Unlike the P&L and Cash Flow Statement the ________ can be kept to year-end figures for the purposes of startup business planning.

Capital Investments include:

What would not be a critical item on the P&L?

What is NOT a smart way to improve a company cash position?

Which is NOT one of the assumptions driving a new venture's revenue model?

If your _________ shows a large lag between when sales are booked and revenue is collected you may want to restructure how you collect payments.

Which of the following is a difficult and nasty issue that can ensnarl the inexperienced entrepreneur even after they have made a sale to a customer?

Which of the following is NOT a financial goalpost for a new venture?

Which of the following is NOT a key deliverable in the financial projections of a new venture?

How do investors generally estimate an exit valuation for a startup technology venture?

Which of the following statements is true with regard to a venture spending money?

Which of the following is a way to shorten the sales cycle for complex B2B products?

Which of the following is considered a long-standing mantra of entrepreneurs?

Many experts in the field advocate this approach for projecting revenue for a new startup?

Which of the following would be a standard line item in a P&L?

Why are monthly financial projections important for investors?

Defining Your Industry Focus and the Type of Business You Want to Start

Defining the Target Customer

Defining the Needs of Target Customers

Defining Solutions for Customers

Defining the Business Model for a Venture

Positioning and Branding a Venture in the Marketplace

A Reality Check on the Venture Concept and the Business Model

Financial Sources for Startups and Corporate Ventures

Organizing the Venture Team

Writing the Business Plan

Making the Pitch

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Exam 9: Projecting the Financial Performance and Requirements for the Venture

What is a sales cycle?

What is NOT a good way to shorten the cash conversion cycle?

Unlike the P&L and Cash Flow Statement the ________ can be kept to year-end figures for the purposes of startup business planning.

Capital Investments include:

What would not be a critical item on the P&L?

What is NOT a smart way to improve a company cash position?

Which is NOT one of the assumptions driving a new venture's revenue model?

If your _________ shows a large lag between when sales are booked and revenue is collected you may want to restructure how you collect payments.

Which of the following is a difficult and nasty issue that can ensnarl the inexperienced entrepreneur even after they have made a sale to a customer?

Which of the following is NOT a financial goalpost for a new venture?

Which of the following is NOT a key deliverable in the financial projections of a new venture?

How do investors generally estimate an exit valuation for a startup technology venture?

Which of the following statements is true with regard to a venture spending money?

Which of the following is a way to shorten the sales cycle for complex B2B products?

Which of the following is considered a long-standing mantra of entrepreneurs?

Many experts in the field advocate this approach for projecting revenue for a new startup?

Which of the following would be a standard line item in a P&L?

Why are monthly financial projections important for investors?

Defining Your Industry Focus and the Type of Business You Want to Start

Defining the Target Customer

Defining the Needs of Target Customers

Defining Solutions for Customers

Defining the Business Model for a Venture

Positioning and Branding a Venture in the Marketplace

A Reality Check on the Venture Concept and the Business Model

Financial Sources for Startups and Corporate Ventures

Organizing the Venture Team

Writing the Business Plan

Making the Pitch

Filters