Question 1

Friends and family should be your first sources of startup money.

Accepted Answer

A) True 
 B)False  False

Question 2

Entrepreneurs should be careful not to weight employee compensation too heavily with stock options to avoid risks to morale should the share price decline significantly.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following must be added to Operating Income when calculating Free Cash Flow?

Accepted Answer

A) Depreciation 
B) Principal Payments 
C) Interest Payments 
D) Capital Expenditures 
E) Tax Payments 
A) Depreciation 
B) Principal Payments 
C) Interest Payments 
D) Capital Expenditures 
E) Tax Payments A

Question 4

Placing a value on your startup is the first thing you should do when raising a round of angel investment.

Accepted Answer

A) True 
 B)False

Question 5

The least desirable way for venture capitalist to harvest an investment is:

Accepted Answer

A) IPO 
B) Acquisition 
C) Buyback 
D) Stock swap 
E) They are equally attractive 
A) IPO 
B) Acquisition 
C) Buyback 
D) Stock swap 
E) They are equally attractive

Question 6

Name at least eight criteria an ideal candidate for venture capital has to meet.

Accepted Answer

a.CEO/lead entrepreneur has significant

Question 7

The first financing for your new business will come from angel investors.

Accepted Answer

A) True 
 B)False

Question 8

Which factor plays the largest role in a venture receiving a second round of venture capital?

Accepted Answer

A) Number of media mentions the start-up receives 
B) Track record in meeting performance milestones. 
C) Success in recruiting talented employees 
D) None of the above 
A) Number of media mentions the start-up receives 
B) Track record in meeting performance milestones. 
C) Success in recruiting talented employees 
D) None of the above

Question 9

A company's growth rate vis-à-vis its industry is not considered when using the Asset-Based valuation method.

Accepted Answer

A) True 
 B)False

Question 10

All of the following is mentioned in the chapter as possible sources of funding that the entrepreneur should explore prior to soliciting investments from family and friends, except:

Accepted Answer

A) Vendor financing 
B) Reduced rent from a landlord 
C) Selling infrastructural assets 
D) Customer financing 
E) Services at reduced rates 
A) Vendor financing 
B) Reduced rent from a landlord 
C) Selling infrastructural assets 
D) Customer financing 
E) Services at reduced rates

Question 11

What are the pros and cons of going public?

Accepted Answer

a.The upsides of going public are: Finan

Question 12

Venture capitalists will invest only if the company has the potential to return at least:

Accepted Answer

A) Seven times their investment in five years 
B) Four times their investment in three years 
C) Five times their investment in two years 
D) Ten times their investment in seven years 
E) Five times their investment in five years 
A) Seven times their investment in five years 
B) Four times their investment in three years 
C) Five times their investment in two years 
D) Ten times their investment in seven years 
E) Five times their investment in five years

Question 13

Valuation of a small, privately held corporation is difficult.
3 The present value of company is the present value of the past free cash flows, plus the residual (terminal)value of the firm.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following types of angels is usually a passive investor?

Accepted Answer

A) Professional 
B) Entrepreneurial 
C) Corporate 
D) Micromanagement 
E) Enthusiast 
A) Professional 
B) Entrepreneurial 
C) Corporate 
D) Micromanagement 
E) Enthusiast

Question 15

Going public is an expensive endeavor.

Accepted Answer

A) True 
 B)False

Question 16

Acquisitions are legally barred, by the SEC, from being paid in cash.

Accepted Answer

A) True 
 B)False

Question 17

IPOs are rare, even among venture capital backed companies.

Accepted Answer

A) True 
 B)False

Question 18

Market-comparable valuation is based on the net income and the startup's capitalization rate.

Accepted Answer

A) True 
 B)False

Question 19

What are the most attractive companies that go public usually backed with?

Accepted Answer

A) Angel capital. 
B) Venture capital. 
C) Positive cash flow. 
D) Investments from family members. 
E) Sweat equity 
A) Angel capital. 
B) Venture capital. 
C) Positive cash flow. 
D) Investments from family members. 
E) Sweat equity

Question 20

Explain how VCs can harvest their investments.What ways do they prefer and what do they avoid?

Accepted Answer

a.Initial Public Offering - preferred me

Friends and family should be your first sources of startup money.

Entrepreneurs should be careful not to weight employee compensation too heavily with stock options to avoid risks to morale should the share price decline significantly.

Which of the following must be added to Operating Income when calculating Free Cash Flow?

Placing a value on your startup is the first thing you should do when raising a round of angel investment.

The least desirable way for venture capitalist to harvest an investment is:

Name at least eight criteria an ideal candidate for venture capital has to meet.

The first financing for your new business will come from angel investors.

Which factor plays the largest role in a venture receiving a second round of venture capital?

A company's growth rate vis-à-vis its industry is not considered when using the Asset-Based valuation method.

All of the following is mentioned in the chapter as possible sources of funding that the entrepreneur should explore prior to soliciting investments from family and friends, except:

What are the pros and cons of going public?

Venture capitalists will invest only if the company has the potential to return at least:

Valuation of a small, privately held corporation is difficult. 3 The present value of company is the present value of the past free cash flows, plus the residual (terminal)value of the firm.

Which of the following types of angels is usually a passive investor?

Going public is an expensive endeavor.

Acquisitions are legally barred, by the SEC, from being paid in cash.

IPOs are rare, even among venture capital backed companies.

Market-comparable valuation is based on the net income and the startup's capitalization rate.

What are the most attractive companies that go public usually backed with?

Explain how VCs can harvest their investments.What ways do they prefer and what do they avoid?

The Power of Entrepreneurship

The Entrepreneurial Process

Opportunity Recognition, Shaping, and Reshaping

Understanding Your Business Model and Developing Your Strategy

Entrepreneurial Marketing

Building the Founding Team

The Business Planning Process

Building Your Pro Forma Financial Statements

Facing Entrepreneurial Ventures Worldwide

Debt and Other Forms of Financing

Legal and Tax Issues, Including Intellectual Property

Entrepreneurial Growth

Social Entrepreneurship: an Overview

Filters

Exam 10: Raising Money for Starting and Growing Businesses

Friends and family should be your first sources of startup money.

Entrepreneurs should be careful not to weight employee compensation too heavily with stock options to avoid risks to morale should the share price decline significantly.

Which of the following must be added to Operating Income when calculating Free Cash Flow?

Placing a value on your startup is the first thing you should do when raising a round of angel investment.

The least desirable way for venture capitalist to harvest an investment is:

Name at least eight criteria an ideal candidate for venture capital has to meet.

The first financing for your new business will come from angel investors.

Which factor plays the largest role in a venture receiving a second round of venture capital?

A company's growth rate vis-à-vis its industry is not considered when using the Asset-Based valuation method.

All of the following is mentioned in the chapter as possible sources of funding that the entrepreneur should explore prior to soliciting investments from family and friends, except:

What are the pros and cons of going public?

Venture capitalists will invest only if the company has the potential to return at least:

Valuation of a small, privately held corporation is difficult. 3 The present value of company is the present value of the past free cash flows, plus the residual (terminal)value of the firm.

Which of the following types of angels is usually a passive investor?

Going public is an expensive endeavor.

Acquisitions are legally barred, by the SEC, from being paid in cash.

IPOs are rare, even among venture capital backed companies.

Market-comparable valuation is based on the net income and the startup's capitalization rate.

What are the most attractive companies that go public usually backed with?

Explain how VCs can harvest their investments.What ways do they prefer and what do they avoid?

The Power of Entrepreneurship

The Entrepreneurial Process

Opportunity Recognition, Shaping, and Reshaping

Understanding Your Business Model and Developing Your Strategy

Entrepreneurial Marketing

Building the Founding Team

The Business Planning Process

Building Your Pro Forma Financial Statements

Facing Entrepreneurial Ventures Worldwide

Debt and Other Forms of Financing

Legal and Tax Issues, Including Intellectual Property

Entrepreneurial Growth

Social Entrepreneurship: an Overview

Filters