Question 1

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 2

Valuation of a small, privately held corporation is difficult.

Accepted Answer

A) True 
 B)False

Question 3

Venture capitalists prefer to invest in entrepreneurs who have competent business plans.

Accepted Answer

A) True 
 B)False

Question 4

What is the underwriter's standard commission for taking a company public?

Accepted Answer

A)  ~1% 
B)  ~3% 
C)  ~5% 
D)  ~7% 
E)  ~10% 
A)  ~1% 
B)  ~3% 
C)  ~5% 
D)  ~7% 
E)  ~10%

Question 5

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 6

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

Accepted Answer

A)  1 year 
B)  2 years 
C)  3 years 
D)  4 years 
E)  5 years 
A)  1 year 
B)  2 years 
C)  3 years 
D)  4 years 
E)  5 years

Question 7

Replacement Value is a variation of:

Accepted Answer

A)  Market-Comparable Valuation Method 
B)  Earning Capitalization Method 
C)  Present Value of Future Cash Flows Method 
D)  Market Capitalization Method 
E)  Asset-based Valuation Method 
A)  Market-Comparable Valuation Method 
B)  Earning Capitalization Method 
C)  Present Value of Future Cash Flows Method 
D)  Market Capitalization Method 
E)  Asset-based Valuation Method

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 11

Business angels are generally satisfied with a lower return than venture capitalists.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Corporate angels may be a headache for a small company.

Accepted Answer

A) True 
 B)False

Question 14

After the internet bubble burst, angel groups stopped investing in seed-stage companies.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

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

Question 17

According to the chapter, the ideal method for valuing a business is asset-based valuation.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

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

Valuation of a small, privately held corporation is difficult.

Venture capitalists prefer to invest in entrepreneurs who have competent business plans.

What is the underwriter's standard commission for taking a company public?

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

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

Replacement Value is a variation of:

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

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

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

Business angels are generally satisfied with a lower return than venture capitalists.

Which of the following is NOT true about Angel groups?

Corporate angels may be a headache for a small company.

After the internet bubble burst, angel groups stopped investing in seed-stage companies.

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

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

According to the chapter, the ideal method for valuing a business is asset-based valuation.

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

The Power of Entrepreneurship

The Entrepreneurial Process

Opportunity Recognition, Shaping, and Reshaping

Prototyping Your Ideas

Understanding Your Business Model and Developing Your Strategy

Entrepreneurial Marketing

Building the Founding Team

The Business Planning Process

Building Your Pro Forma Financial Statements

Financing Entrepreneurial Ventures Worldwide

Debt and Other Forms of Financing

Legal and Tax Issues, Including Intellectual Property

Entrepreneurial Growth

Social Entrepreneurship

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Exam 11: Raising Money for Starting and Growing Businesses

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

Valuation of a small, privately held corporation is difficult.

Venture capitalists prefer to invest in entrepreneurs who have competent business plans.

What is the underwriter's standard commission for taking a company public?

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

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

Replacement Value is a variation of:

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

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

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

Business angels are generally satisfied with a lower return than venture capitalists.

Which of the following is NOT true about Angel groups?

Corporate angels may be a headache for a small company.

After the internet bubble burst, angel groups stopped investing in seed-stage companies.

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

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

According to the chapter, the ideal method for valuing a business is asset-based valuation.

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

The Power of Entrepreneurship

The Entrepreneurial Process

Opportunity Recognition, Shaping, and Reshaping

Prototyping Your Ideas

Understanding Your Business Model and Developing Your Strategy

Entrepreneurial Marketing

Building the Founding Team

The Business Planning Process

Building Your Pro Forma Financial Statements

Financing Entrepreneurial Ventures Worldwide

Debt and Other Forms of Financing

Legal and Tax Issues, Including Intellectual Property

Entrepreneurial Growth

Social Entrepreneurship

Filters