Question 1

________ are limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms.

Accepted Answer

A)  Venture capital firms 
B)  Business angels 
C)  Institutional investors 
D)  Investment bankers 
E)  Business capitalists 
A)  Venture capital firms 
B)  Business angels 
C)  Institutional investors 
D)  Investment bankers 
E)  Business capitalists

Question 2

Historically, commercial banks ________.

Accepted Answer

A)  have been a good source of funds for startup firms 
B)  have not funded startup firms at all 
C)  have been a good source of funds for manufacturing firm startups but not for service firm startups 
D)  have been a good source of funds for service firm startups but not for manufacturing firm startups 
E)  have not been a good source of funds for startup firms 
A)  have been a good source of funds for startup firms 
B)  have not funded startup firms at all 
C)  have been a good source of funds for manufacturing firm startups but not for service firm startups 
D)  have been a good source of funds for service firm startups but not for manufacturing firm startups 
E)  have not been a good source of funds for startup firms

Question 3

A brief, carefully constructed statement that outlines the merits of a business opportunity is called a(n) ________ speech.

Accepted Answer

A)  subway 
B)  sway 
C)  bootstrap 
D)  teaser 
E)  elevator 
A)  subway 
B)  sway 
C)  bootstrap 
D)  teaser 
E)  elevator

Question 4

Venture capital firms are ________ of money managers who raise money in "funds" to invest in startups and growing firms.

Accepted Answer

A)  limited partnerships 
B)  finance associations 
C)  consortiums 
D)  collations 
E)  strategic partnerships 
A)  limited partnerships 
B)  finance associations 
C)  consortiums 
D)  collations 
E)  strategic partnerships

Question 5

Venture capital involves getting a loan or selling corporate bonds.

Accepted Answer

A) True 
 B)False

Question 6

The Partnering for Success feature in Chapter 10 focuses on Startup Weekend. Startup Weekend is a for-profit organization that ________.

Accepted Answer

A)  creates a context in which small groups of people can start a business in 54 hours (usually over a weekend) 
B)  sponsors "weekend" events that connect entrepreneurs with mentors, advisors and potential investors 
C)  provides 54-hour weekend retreats for people to gather and learn as much as possible about the startup process 
D)  sponsors pitch events, usually over a weekend, that allow entrepreneurs to pitch their business ideas to angel investors 
E)  facilitates weekend business plan competitions across the United States 
A)  creates a context in which small groups of people can start a business in 54 hours (usually over a weekend) 
B)  sponsors "weekend" events that connect entrepreneurs with mentors, advisors and potential investors 
C)  provides 54-hour weekend retreats for people to gather and learn as much as possible about the startup process 
D)  sponsors pitch events, usually over a weekend, that allow entrepreneurs to pitch their business ideas to angel investors 
E)  facilitates weekend business plan competitions across the United States

Question 7

Why do most firms need funding? Provide a brief explanation of each reason.

Accepted Answer

The three reasons that most new firms ne

Question 8

Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.

Accepted Answer

A) True 
 B)False

Question 9

Factoring is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

Accepted Answer

A) True 
 B)False

Question 10

Historically, commercial banks have been viewed as an excellent source of financing for startup firms.

Accepted Answer

A) True 
 B)False

Question 11

The SBIR is a ________-phase program, meaning that firms that qualify have the potential to receive more than one grant to fund a particular proposal.

Accepted Answer

A)  two 
B)  three 
C)  six 
D)  nine 
E)  twelve 
A)  two 
B)  three 
C)  six 
D)  nine 
E)  twelve

Question 12

Angel investors, private placement, venture capital, and initial public offerings are the most common sources of equity funding.

Accepted Answer

A) True 
 B)False

Question 13

The SBIR and STTR programs provide entrepreneurs access to mentors, advisors and potential investors rather than cash.

Accepted Answer

A) True 
 B)False

Question 14

A lease is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

Accepted Answer

A) True 
 B)False

Question 15

Typically, the seed money that gets a company off the ground comes from a commercial bank.

Accepted Answer

A) True 
 B)False

Question 16

For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

Accepted Answer

A)  Lengthy product development cycles 
B)  Costs associated with building a brand 
C)  Cash flow challenges 
D)  Capital investments 
E)  Personnel costs 
A)  Lengthy product development cycles 
B)  Costs associated with building a brand 
C)  Cash flow challenges 
D)  Capital investments 
E)  Personnel costs

Question 17

The two types of crowdfunding sites are ________-based and ________-based.

Accepted Answer

A)  rewards; equity 
B)  equity; debt 
C)  expectations; performance 
D)  private; nonprivate 
E)  domestic; international 
A)  rewards; equity 
B)  equity; debt 
C)  expectations; performance 
D)  private; nonprivate 
E)  domestic; international

Question 18

Which of the following is NOT a source of equity funding?

Accepted Answer

A)  Initial public offering 
B)  Angel investors 
C)  Private placement 
D)  Venture capital 
E)  Government grants 
A)  Initial public offering 
B)  Angel investors 
C)  Private placement 
D)  Venture capital 
E)  Government grants

Question 19

The major advantage of leasing is that ________.

Accepted Answer

A)  it enables a company to have access to average or above average facilities and equipment 
B)  it enables a company to acquire the use of assets with little or no down payment 
C)  it is cheaper in the long run than purchasing 
D)  a lease agreement is easier to negotiate than a purchase agreement 
E)  it is easier to obtain credit on a lease than a purchase 
A)  it enables a company to have access to average or above average facilities and equipment 
B)  it enables a company to acquire the use of assets with little or no down payment 
C)  it is cheaper in the long run than purchasing 
D)  a lease agreement is easier to negotiate than a purchase agreement 
E)  it is easier to obtain credit on a lease than a purchase

Question 20

In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture's life to fund the development of a prototype and feasibility analysis is referred to as ________ funding.

Accepted Answer

A)  seed 
B)  second-stage 
C)  first-stage 
D)  mezzanine 
E)  startup 
A)  seed 
B)  second-stage 
C)  first-stage 
D)  mezzanine 
E)  startup

________ are limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms.

Historically, commercial banks ________.

A brief, carefully constructed statement that outlines the merits of a business opportunity is called a(n) ________ speech.

Venture capital firms are ________ of money managers who raise money in "funds" to invest in startups and growing firms.

Venture capital involves getting a loan or selling corporate bonds.

The Partnering for Success feature in Chapter 10 focuses on Startup Weekend. Startup Weekend is a for-profit organization that ________.

Why do most firms need funding? Provide a brief explanation of each reason.

Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.

Factoring is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

Historically, commercial banks have been viewed as an excellent source of financing for startup firms.

The SBIR is a ________-phase program, meaning that firms that qualify have the potential to receive more than one grant to fund a particular proposal.

Angel investors, private placement, venture capital, and initial public offerings are the most common sources of equity funding.

The SBIR and STTR programs provide entrepreneurs access to mentors, advisors and potential investors rather than cash.

A lease is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

Typically, the seed money that gets a company off the ground comes from a commercial bank.

For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

The two types of crowdfunding sites are -based and -based.

Which of the following is NOT a source of equity funding?

The major advantage of leasing is that ________.

In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture's life to fund the development of a prototype and feasibility analysis is referred to as ________ funding.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Preparing the Proper Ethical and Legal Foundation

Assessing a New Ventures Financial Strength and Viability

Building a New-Venture Team

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Exam 10: Getting Financing or Funding

________ are limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms.

Historically, commercial banks ________.

A brief, carefully constructed statement that outlines the merits of a business opportunity is called a(n) ________ speech.

Venture capital firms are ________ of money managers who raise money in "funds" to invest in startups and growing firms.

Venture capital involves getting a loan or selling corporate bonds.

The Partnering for Success feature in Chapter 10 focuses on Startup Weekend. Startup Weekend is a for-profit organization that ________.

Why do most firms need funding? Provide a brief explanation of each reason.

Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.

Factoring is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

Historically, commercial banks have been viewed as an excellent source of financing for startup firms.

The SBIR is a ________-phase program, meaning that firms that qualify have the potential to receive more than one grant to fund a particular proposal.

Angel investors, private placement, venture capital, and initial public offerings are the most common sources of equity funding.

The SBIR and STTR programs provide entrepreneurs access to mentors, advisors and potential investors rather than cash.

A lease is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

Typically, the seed money that gets a company off the ground comes from a commercial bank.

For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

The two types of crowdfunding sites are ________-based and ________-based.

Which of the following is NOT a source of equity funding?

The major advantage of leasing is that ________.

In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture's life to fund the development of a prototype and feasibility analysis is referred to as ________ funding.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

Preparing the Proper Ethical and Legal Foundation

Assessing a New Ventures Financial Strength and Viability

Building a New-Venture Team

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

The two types of crowdfunding sites are -based and -based.