Question 1

Modified-book value is applicable to small, fast-growing, firms.
:

Accepted Answer

A) True 
 B)False

Question 2

Corporate angels may be a headache for a small company.

Accepted Answer

A) True 
 B)False

Question 3

Venture capitalists prefer to invest in entrepreneurs who have long-term business plans.

Accepted Answer

A) True 
 B)False

Question 4

What is the term for the event by which the investor realizes his or her investments?

Accepted Answer

A) Crop 
B) Gain 
C) Exit 
D) Yield 
E) Cream 
A) Crop 
B) Gain 
C) Exit 
D) Yield 
E) Cream

Question 5

In addition to money, what value should a venture capitalist bring to a start-up?

Accepted Answer

A) Talent acquisition 
B) Industry contacts 
C) Professional Contacts 
D) All of the above 
A) Talent acquisition 
B) Industry contacts 
C) Professional Contacts 
D) All of the above

Question 6

What will a VC usually receive in exchange for the money invested?

Accepted Answer

A) Common stock 
B) Stock options 
C) Promissory notes 
D) Letter of deposit 
E) Convertible preferred stock 
A) Common stock 
B) Stock options 
C) Promissory notes 
D) Letter of deposit 
E) Convertible preferred stock

Question 7

From a venture capitalist's perspective, an introduction to an entrepreneur through which of the following people is most worrisome?

Accepted Answer

A) Other entrepreneurs 
B) Lawyers 
C) Finders 
D) Angels 
E) Bankers 
A) Other entrepreneurs 
B) Lawyers 
C) Finders 
D) Angels 
E) Bankers

Question 8

According to the chapter, informal investors provide $100 billion per year to startup and young businesses in the US alone.

Accepted Answer

A) True 
 B)False

Question 9

Name the ways of valuing a business and explain why none of them can be called ideal.

Accepted Answer

a.Earning-capitalization valuation
b.Pre

Question 10

In general, a venture capitalist should not sit on more than what number of portfolio company boards?

Accepted Answer

A) 2 
B) 5 
C) 8 
D) 10 
E) 12 
A) 2 
B) 5 
C) 8 
D) 10 
E) 12

Question 11

Angel investors are one category of formal investors

Accepted Answer

A) True 
 B)False

Question 12

What is the term for the founder's compensation to be paid a few years after the company is acquired, if the company meets certain targets?

Accepted Answer

A) Added value 
B) Plus value 
C) Money on the table 
D) Premium for excess 
E) Earn-out 
A) Added value 
B) Plus value 
C) Money on the table 
D) Premium for excess 
E) Earn-out

Question 13

The modified-book value method of valuation's main weakness is that it reflects the past rather than the future.

Accepted Answer

A) True 
 B)False

Question 14

The difference between a seed-stage company and a startup is that the latter, unlike the former, is already in business.

Accepted Answer

A) True 
 B)False

Question 15

Venture capital investors expect a higher rate of return for mezzanine stage investments than for bridge financing.

Accepted Answer

A) True 
 B)False

Question 16

What percent of informal investment is directed to businesses founded by the investor's relative?

Accepted Answer

A) 25% 
B) 35% 
C) 40% 
D) 50% 
E) 65% 
A) 25% 
B) 35% 
C) 40% 
D) 50% 
E) 65%

Question 17

Which of the following is NOT true about Angel groups?

Accepted Answer

A) They often consist of successful entrepreneurs and business people 
B) They do not want unsolicited bids 
C) They grew in numbers during the late 1990s 
D) They focus on seed and early-stage funding. 
A) They often consist of successful entrepreneurs and business people 
B) They do not want unsolicited bids 
C) They grew in numbers during the late 1990s 
D) They focus on seed and early-stage funding.

Question 18

The period when the prior shareholders are not permitted to sell any of their stock is called:

Accepted Answer

A) Lockup period 
B) Blocking period 
C) Limited period 
D) Banning period 
E) None of the above 
A) Lockup period 
B) Blocking period 
C) Limited period 
D) Banning period 
E) None of the above

Question 19

Selling the company is the most common way of harvesting an investment

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a non-financial reason for an angel to invest?

Accepted Answer

A) A desire to mentor entrepreneurs 
B) Recreation 
C) To indirectly benefit society 
D) All of the above 
E) None of the above 
A) A desire to mentor entrepreneurs 
B) Recreation 
C) To indirectly benefit society 
D) All of the above 
E) None of the above

Modified-book value is applicable to small, fast-growing, firms. :

Corporate angels may be a headache for a small company.

Venture capitalists prefer to invest in entrepreneurs who have long-term business plans.

What is the term for the event by which the investor realizes his or her investments?

In addition to money, what value should a venture capitalist bring to a start-up?

What will a VC usually receive in exchange for the money invested?

From a venture capitalist's perspective, an introduction to an entrepreneur through which of the following people is most worrisome?

According to the chapter, informal investors provide $100 billion per year to startup and young businesses in the US alone.

Name the ways of valuing a business and explain why none of them can be called ideal.

In general, a venture capitalist should not sit on more than what number of portfolio company boards?

Angel investors are one category of formal investors

What is the term for the founder's compensation to be paid a few years after the company is acquired, if the company meets certain targets?

The modified-book value method of valuation's main weakness is that it reflects the past rather than the future.

The difference between a seed-stage company and a startup is that the latter, unlike the former, is already in business.

Venture capital investors expect a higher rate of return for mezzanine stage investments than for bridge financing.

What percent of informal investment is directed to businesses founded by the investor's relative?

Which of the following is NOT true about Angel groups?

The period when the prior shareholders are not permitted to sell any of their stock is called:

Selling the company is the most common way of harvesting an investment

Which of the following is a non-financial reason for an angel to invest?

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

Modified-book value is applicable to small, fast-growing, firms. :

Corporate angels may be a headache for a small company.

Venture capitalists prefer to invest in entrepreneurs who have long-term business plans.

What is the term for the event by which the investor realizes his or her investments?

In addition to money, what value should a venture capitalist bring to a start-up?

What will a VC usually receive in exchange for the money invested?

From a venture capitalist's perspective, an introduction to an entrepreneur through which of the following people is most worrisome?

According to the chapter, informal investors provide $100 billion per year to startup and young businesses in the US alone.

Name the ways of valuing a business and explain why none of them can be called ideal.

In general, a venture capitalist should not sit on more than what number of portfolio company boards?

Angel investors are one category of formal investors

What is the term for the founder's compensation to be paid a few years after the company is acquired, if the company meets certain targets?

The modified-book value method of valuation's main weakness is that it reflects the past rather than the future.

The difference between a seed-stage company and a startup is that the latter, unlike the former, is already in business.

Venture capital investors expect a higher rate of return for mezzanine stage investments than for bridge financing.

What percent of informal investment is directed to businesses founded by the investor's relative?

Which of the following is NOT true about Angel groups?

The period when the prior shareholders are not permitted to sell any of their stock is called:

Selling the company is the most common way of harvesting an investment

Which of the following is a non-financial reason for an angel to invest?

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