Exam 13: Financing for Startups

Consider that you have just been offered a million dollars to grow your business.However,the venture capitalist group will be stepping in as the management team,and you will retain 16% of the company.What should you consider in making your decision?

Free

(Essay)

4.8/5

(75)

Question 1

Correct Answer:

Verified

Most entrepreneurs give up a portion of their company and are more likely to succeed if they do so.One should consider one's personal need for control as well as what the investors are likely to bring to the company to help it succeed.One can consider the compatibility of goals and the likelihood of working together successfully.Consideration should be given to the post-investment growth potential and what the remaining percentage may translate to in terms of cash value.

An angel investor is frequently a family member or close friend.

Free

(True/False)

4.7/5

(72)

Question 2

Correct Answer:

Verified

False

If a VC offers you $2 million for a third of your company,what was your pre-money valuation?

Free

(Multiple Choice)

4.9/5

(79)

Question 3

Correct Answer:

Verified

In 1979,the venture capital industry benefited from what action?

(Multiple Choice)

4.9/5

(88)

Question 4

An investor has offered $150,000 for 20% of the company.The company has a pre-money valuation of $350,000.Should the entrepreneur consider the offer?

(Multiple Choice)

4.8/5

(73)

Question 5

In short,VCs look for ______,big markets,and innovative ideas.

(Multiple Choice)

4.8/5

(76)

Question 6

Which of the following is another term for convertible debt?

(Multiple Choice)

4.7/5

(78)

Question 7

Describe what you should look for during your assessment of a venture capitalist.

(Essay)

4.8/5

(90)

Question 8

Entrepreneurs can seek advice from lawyers and accountants to help determine the market rates for companies like theirs.

(True/False)

4.8/5

(80)

Question 9

Which type of angel is most likely to intervene if the business is not going well?

(Multiple Choice)

5.0/5

(75)

Question 10

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

(Essay)

4.7/5

(93)

Question 11

How far back can we track the history of venture capital?

(Multiple Choice)

4.7/5

(79)

Question 12

What qualifies someone as an accredited investor?

(Multiple Choice)

4.9/5

(82)

Question 13

Angel investors and venture capitalists are mostly professional money managers.

(True/False)

4.8/5

(94)

Question 14

______ is the company's value before it receives outside investment.

(Multiple Choice)

4.8/5

(91)

Question 15

As a business grows and starts to take in more revenue,entrepreneurs may seek investment through the mezzanine stage of financing.

(True/False)

4.9/5

(59)

Question 16

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

(True/False)

4.9/5

(85)

Question 17

Even though your business may not currently be profitable,investors will want to know how many customers you have,primarily because it will show the potential ______.

(Multiple Choice)

4.9/5

(83)

Question 18

The typical investment range for angel investors is generally thought to be ______.

(Multiple Choice)

4.9/5

(70)

Question 19

______ angels,often independently wealthy,tend to invest for pleasure.

(Multiple Choice)

4.8/5

(74)

Question 20

Showing 1 - 20 of 93

Consider that you have just been offered a million dollars to grow your business.However,the venture capitalist group will be stepping in as the management team,and you will retain 16% of the company.What should you consider in making your decision?

An angel investor is frequently a family member or close friend.

If a VC offers you $2 million for a third of your company,what was your pre-money valuation?

In 1979,the venture capital industry benefited from what action?

An investor has offered $150,000 for 20% of the company.The company has a pre-money valuation of $350,000.Should the entrepreneur consider the offer?

In short,VCs look for ______,big markets,and innovative ideas.

Which of the following is another term for convertible debt?

Describe what you should look for during your assessment of a venture capitalist.

Entrepreneurs can seek advice from lawyers and accountants to help determine the market rates for companies like theirs.

Which type of angel is most likely to intervene if the business is not going well?

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

How far back can we track the history of venture capital?

What qualifies someone as an accredited investor?

Angel investors and venture capitalists are mostly professional money managers.

______ is the company's value before it receives outside investment.

As a business grows and starts to take in more revenue,entrepreneurs may seek investment through the mezzanine stage of financing.

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

Even though your business may not currently be profitable,investors will want to know how many customers you have,primarily because it will show the potential ______.

The typical investment range for angel investors is generally thought to be ______.

______ angels,often independently wealthy,tend to invest for pleasure.

Practicing Entrepreneurship

Activating an Entrepreneurial Mindset

Creating and Recognizing New Opportunities

Using Design Thinking

Building Business Models

Developing Your Customers

Testing and Experimenting With New Ideas

Supplement A: Financial Statements and Projections for Startups

Developing Networks and Building Teams

Supplement B: the Pitch Deck

Creating Revenue Models

Planning for Entrepreneurs

Anticipating Failure

Bootstrapping and Crowdfunding for Resources

Navigating Legal and Ip Issues

Engaging Customers Through Marketing

Supporting Social Entrepreneurship

Filters