Exam 10: Raising Money for Starting and Growing Businesses

What may be some drawback in getting acquired?

Which of the following is not one of the six top factors venture capitalists evaluate in analyzing a candidate for investment?

According to the GEM study, half of all informal investors are expecting their money to be returned within how many years?

Give a list and a brief description of the possible ways to finance a new venture.

Discuss the most critical aspects of a 5 year pro-forma statement as it relates to risk and valuation a.Certain factors will weigh more heavily in the attainment of desired financial results. b.Some of those factors will be facts, but others will be assumptions c.The assumptions must not merely be noted, but must be questions that the venture is aggressively trying to confirm/deny. d.The ability to test, iterate, market, and research to answer critical assumptions will directly impact a company's valuation e.More assumptions can make an investment riskier, but entrepreneurs who aren't able to confirm/deny assumption in time to adapt accordingly are a risky team to invest in. f.

Banks expect loans to be secured by positive cash flow.

A rapidly growing, high-potential firm will generate a lot of free cash flow in its first few years.

Replacement Value is a variation of:

Professional angels are a category of investors primarily comprised of retired entrepreneurs.

For the entrepreneur advancing through the IPO process, what is the step that immediately follows the SEC's approval of the preliminary prospectus?

Explain why the underwriter of an IPO often tries to lower the price of the stocks in the offering.

Discuss some intangible factors in finding the right venture capitalist to partner with.

Why would a company want to be acquired?