Exam 13: Financing for Startups

Describe what might occur during the market analysis component of due diligence,prior to the actual investment.

Describe the three typical exit strategies available during the due diligence process.What companies are likely to use each?

Angel investors and venture capitalists are mostly professional money managers.

Convertible debt can turn into ______ when money is received from a venture capitalist.

What practice allows larger companies to purchase smaller companies to increase profitability or eliminate competition?

______ consist(s)of larger amounts of funds provided for companies that have a team in place and a product or service tested or piloted,but as yet show little or no revenue.

By issuing convertible debt,the entrepreneur will become the minority stockholder and lenders will assume control over how the company is run.

The easiest way for startups to determine their company's potential is to ______.

Pre-money valuation is the post-money valuation minus the ______.

What signals the end of the due diligence period?

Seed-stage financing consists of small amounts of capital to help entrepreneurs prove a concept.

______ is the company's value after it receives a round of financing.

Equity financing is defined as ______.

An entrepreneur should keep 90% of the equity until the financing has been worked out.

If an entrepreneur issues convertible debt,he or she will lose control of the company.

Generally speaking,many corporate angels seek what within the venture?

Which of the following is a professional investor who generally invests in early-stage and emerging companies because of perceived long-term growth potential?

Generally,if a venture is at an early stage,then venture capital is the most likely source of funding.

An entrepreneur has conducted crowdfunding to raise enough money for patents and building the founding team.He is now looking for funds to form a prototype and pitch the product to new investors.Which of the following is the most likely source of funds?

In general,entrepreneurs may raise what amount through the 3 Fs?