Question 1

If an entrepreneur issues convertible debt, he or she will lose control of the company.

Accepted Answer

A) True 
 B)False

Question 2

An investor is offered $150,000 for 20% of the company.The company has a pre-money valuation of $350,000.Should the entrepreneur consider the offer?

Accepted Answer

A) No, the investor is asking too great a percentage. 
B) Yes, the investor is asking for less than the value of the investment. 
C) No, the investor is not offering enough for the value of the company. 
D) it cannot be determined 
A) No, the investor is asking too great a percentage. 
B) Yes, the investor is asking for less than the value of the investment. 
C) No, the investor is not offering enough for the value of the company. 
D) it cannot be determined

Question 3

______ consists of small amounts of capital given to help prove a concept.

Accepted Answer

A) Startup loans 
B) Seed-stage financing 
C) Startup financing 
D) Early-stage financing 
A) Startup loans 
B) Seed-stage financing 
C) Startup financing 
D) Early-stage financing

Question 4

A company's pre-money valuation is $500,000 and the post-money valuation is $600,000.How much did the angel invest?

Accepted Answer

A) $5,000 
B) $50,000 
C) $100,000 
D) it cannot be determined 
A) $5,000 
B) $50,000 
C) $100,000 
D) it cannot be determined

Question 5

Who is involved in the due diligence process?

Accepted Answer

A) angel investors 
B) venture capitalists 
C) angel investors and venture capitalists 
D) banks 
A) angel investors 
B) venture capitalists 
C) angel investors and venture capitalists 
D) banks

Question 6

Seed-stage financing consists of small amounts of capital to help entrepreneurs prove a concept.

Accepted Answer

A) True 
 B)False

Question 7

Describe what might occur during the market analysis component of due diligence, prior to the actual investment.

Accepted Answer

Consideration should be given to establi

Question 8

Which of the following would be useful when valuing your company?

Accepted Answer

A) advice from family and friends 
B) success of a similar company in another part of the country 
C) advice from an accountant who has clients in a similar market and industry 
D) industry experts from another part of the country 
A) advice from family and friends 
B) success of a similar company in another part of the country 
C) advice from an accountant who has clients in a similar market and industry 
D) industry experts from another part of the country

Question 9

Which of the following is an online source for angel investors?

Accepted Answer

A) AngelList 
B) LinkedIn 
C) SBA.gov 
D) Investorslist 
A) AngelList 
B) LinkedIn 
C) SBA.gov 
D) Investorslist

Question 10

What feature of registering a company allows you to set aside a portion of your stock for future employees?

Accepted Answer

A) reserve funds 
B) option pools 
C) stock reserves 
D) employee stock option plans 
A) reserve funds 
B) option pools 
C) stock reserves 
D) employee stock option plans

Question 11

______ angels are successful entrepreneurs who want active involvement in the companies they invest in.

Accepted Answer

A) Entrepreneur 
B) Professional 
C) Enthusiast 
D) Micromanagement 
A) Entrepreneur 
B) Professional 
C) Enthusiast 
D) Micromanagement

Question 12

When valuing a seed-stage, startup, or early-stage company, which of the following is most likely to be considered?

Accepted Answer

A) the company's history of sales 
B) how much time it will take for the business to become profitable 
C) the length of time invested in developing the product or service 
D) the amount of capital already raised by the founders 
A) the company's history of sales 
B) how much time it will take for the business to become profitable 
C) the length of time invested in developing the product or service 
D) the amount of capital already raised by the founders

Question 13

This exit strategy allows the entrepreneur an opportunity to buy back venture capital stock at cost and an additional premium.

Accepted Answer

A) IPO 
B) exit clause 
C) buyback 
D) retract clause 
A) IPO 
B) exit clause 
C) buyback 
D) retract clause

Question 14

Which of the following is an important distinction between angels and VCs?

Accepted Answer

A) VC decisions are made with committees 
B) VCs are responsible for their own decisions 
C) VCs provide investments to seed companies 
D) VCs invest personal funds 
A) VC decisions are made with committees 
B) VCs are responsible for their own decisions 
C) VCs provide investments to seed companies 
D) VCs invest personal funds

Question 15

Venture capitalists often reject plans and proposals for which of the following reason(s)?

Accepted Answer

A) the business is not a good fit with the fund's criteria 
B) the VC only invests in companies with a referral 
C) the VC does not operate in your geographical area 
D) all of these 
A) the business is not a good fit with the fund's criteria 
B) the VC only invests in companies with a referral 
C) the VC does not operate in your geographical area 
D) all of these

Question 16

______ is a short-term loan that can be turned into equity when future financing is issued.

Accepted Answer

A) Convertible debt 
B) Angel funding 
C) Business load 
D) Equity loan 
A) Convertible debt 
B) Angel funding 
C) Business load 
D) Equity loan

Question 17

What qualifies someone as an accredited investor?

Accepted Answer

A) only a willingness to invest 
B) net worth of the equivalent being invested 
C) net worth over $1 million or income over $200,000 
D) net worth over $200,000 
A) only a willingness to invest 
B) net worth of the equivalent being invested 
C) net worth over $1 million or income over $200,000 
D) net worth over $200,000

Question 18

______ angels often seek to be paid advisers.They general come from a profession such as lawyers or accountants.

Accepted Answer

A) Corporate 
B) Entrepreneur 
C) Professional 
D) Enthusiast 
A) Corporate 
B) Entrepreneur 
C) Professional 
D) Enthusiast

Question 19

In spite of media hype, what is the likely rate of failure for companies backed by venture capitalists?

Accepted Answer

A) 1 out of 10 
B) 50% 
C) 1 out of 4 
D) 3 out of 4 
A) 1 out of 10 
B) 50% 
C) 1 out of 4 
D) 3 out of 4

Question 20

Consider that you have just been offered a million dollars to grow your business.However, the venture capitalist group will be stepping in as the management team, and you will retain 16% of the company.What should you consider in making your decision?

Accepted Answer

Most entrepreneurs give up a portion of

If an entrepreneur issues convertible debt, he or she will lose control of the company.

An investor is offered $150,000 for 20% of the company.The company has a pre-money valuation of $350,000.Should the entrepreneur consider the offer?

______ consists of small amounts of capital given to help prove a concept.

A company's pre-money valuation is $500,000 and the post-money valuation is $600,000.How much did the angel invest?

Who is involved in the due diligence process?

Seed-stage financing consists of small amounts of capital to help entrepreneurs prove a concept.

Describe what might occur during the market analysis component of due diligence, prior to the actual investment.

Which of the following would be useful when valuing your company?

Which of the following is an online source for angel investors?

What feature of registering a company allows you to set aside a portion of your stock for future employees?

______ angels are successful entrepreneurs who want active involvement in the companies they invest in.

When valuing a seed-stage, startup, or early-stage company, which of the following is most likely to be considered?

This exit strategy allows the entrepreneur an opportunity to buy back venture capital stock at cost and an additional premium.

Which of the following is an important distinction between angels and VCs?

Venture capitalists often reject plans and proposals for which of the following reason(s)?

______ is a short-term loan that can be turned into equity when future financing is issued.

What qualifies someone as an accredited investor?

______ angels often seek to be paid advisers.They general come from a profession such as lawyers or accountants.

In spite of media hype, what is the likely rate of failure for companies backed by venture capitalists?

Consider that you have just been offered a million dollars to grow your business.However, the venture capitalist group will be stepping in as the management team, and you will retain 16% of the company.What should you consider in making your decision?

Entrepreneurship: a Global Social Movement

Practicing Entrepreneurship

Developing an Entrepreneurial Mindset

Supporting Social Entrepreneurship

Generating New Ideas

Using Design Thinking

Testing and Experimenting in Markets

Building Business Models

Planning for Entrepreneurs

Creating Revenue Models

Learning From Failure

Bootstrapping for Resources

Developing Networks

Navigating Legal and Ip Issues

Marketing and Pitching Your Idea

Financial Statements and Projections for Startups

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Exam 13: Financing for Startups

If an entrepreneur issues convertible debt, he or she will lose control of the company.

An investor is offered $150,000 for 20% of the company.The company has a pre-money valuation of $350,000.Should the entrepreneur consider the offer?

______ consists of small amounts of capital given to help prove a concept.

A company's pre-money valuation is $500,000 and the post-money valuation is $600,000.How much did the angel invest?

Who is involved in the due diligence process?

Seed-stage financing consists of small amounts of capital to help entrepreneurs prove a concept.

Describe what might occur during the market analysis component of due diligence, prior to the actual investment.

Which of the following would be useful when valuing your company?

Which of the following is an online source for angel investors?

What feature of registering a company allows you to set aside a portion of your stock for future employees?

______ angels are successful entrepreneurs who want active involvement in the companies they invest in.

When valuing a seed-stage, startup, or early-stage company, which of the following is most likely to be considered?

This exit strategy allows the entrepreneur an opportunity to buy back venture capital stock at cost and an additional premium.

Which of the following is an important distinction between angels and VCs?

Venture capitalists often reject plans and proposals for which of the following reason(s)?

______ is a short-term loan that can be turned into equity when future financing is issued.

What qualifies someone as an accredited investor?

______ angels often seek to be paid advisers.They general come from a profession such as lawyers or accountants.

In spite of media hype, what is the likely rate of failure for companies backed by venture capitalists?

Consider that you have just been offered a million dollars to grow your business.However, the venture capitalist group will be stepping in as the management team, and you will retain 16% of the company.What should you consider in making your decision?

Entrepreneurship: a Global Social Movement

Practicing Entrepreneurship

Developing an Entrepreneurial Mindset

Supporting Social Entrepreneurship

Generating New Ideas

Using Design Thinking

Testing and Experimenting in Markets

Building Business Models

Planning for Entrepreneurs

Creating Revenue Models

Learning From Failure

Bootstrapping for Resources

Developing Networks

Navigating Legal and Ip Issues

Marketing and Pitching Your Idea

Financial Statements and Projections for Startups

the Pitch Deck

Filters