Exam 11: Sources of Capital

When a bank grants a line of credit,a "commitment fee" is assessed at the start of the loan.

Most established R&D limited partnerships:

Small Business Innovation Research grants are funded by federal agencies,which provide a portion of their R&D funds to small businesses.

Equity financing is often referred to as blood equity. 

Most R&D limited partnerships are not successful.

All ventures have some equity.

________ financing does not require any collateral.

The most frequently used source of short-term funds when collateral is available is:

Obtaining funds for the company in exchange for ownership is equity financing.

Long-term loans from commercial banks are usually readily available to small startup firms.

Private offerings:

An entrepreneur contributing his or her own capital would be an example of internally generated funds.

If the amount of money provided by family members or friends is small and in the form of equity financing,they do not have an ownership position in the venture.

Funds obtained from ________ are the least expensive in terms of cost and control.

Explain what problems an entrepreneur might avoid by using bootstrap financing instead of outside capital.

When a company receives an SBIR grant,any patent rights and software generated belong to:

The SBA's Microloan program is their primary business loan program.

In limited partnerships:

Explain the three major components of an R&D partnership.

External investors generally require the entrepreneur to commit a large percentage of his or her personal assets.