Question 1

In a private venture capital firm,the ________ manages the fund in exchange for a management fee and a percentage of profits.

Accepted Answer

A)  limited partner 
B)  general partner 
C)  entrepreneur 
D)  referral source 
A)  limited partner 
B)  general partner 
C)  entrepreneur 
D)  referral source

Question 2

The private equity market provides capital for privately held ventures.

Accepted Answer

A) True 
 B)False

Question 3

An extension of the earnings approach is the book value method.

Accepted Answer

A) True 
 B)False

Question 4

Using the ________ method of evaluating the firm,cash flow is adjusted for the time value of money.

Accepted Answer

A)  present value of future cash flow 
B)  replacement value 
C)  book value 
D)  earnings approach 
A)  present value of future cash flow 
B)  replacement value 
C)  book value 
D)  earnings approach

Question 5

The industry sector receiving the largest share of venture capital in 2017 was in:

Accepted Answer

A)  Internet. 
B)  health care. 
C)  computer software. 
D)  computer hardware. 
A)  Internet. 
B)  health care. 
C)  computer software. 
D)  computer hardware.

Question 6

Balance sheet items are carried at cost,a good indicator of fair market value in valuing a company.

Accepted Answer

A) True 
 B)False

Question 7

The least liquid current asset,________,is eliminated when calculating the acid test ratio.

Accepted Answer

A)  cash 
B)  accounts receivable 
C)  inventory 
D)  land 
A)  cash 
B)  accounts receivable 
C)  inventory 
D)  land

Question 8

Business angels usually find their deals through:

Accepted Answer

A)  the Internet. 
B)  referral sources. 
C)  venture capitalists. 
D)  cold calling. 
A)  the Internet. 
B)  referral sources. 
C)  venture capitalists. 
D)  cold calling.

Question 9

Blue-sky laws may speed up the process and lessen costs to the company going public.

Accepted Answer

A) True 
 B)False

Question 10

The acid test ratio is a more rigorous test of the short-term liquidity of the venture as it eliminates inventory,which is the least liquid current asset.

Accepted Answer

A) True 
 B)False

Question 11

Angel investors,family,and friends are often the source of funds in development financing.

Accepted Answer

A) True 
 B)False

Question 12

Which type of risk-capital market is available as a stage one funding source only for high-potential ventures

Accepted Answer

A)  Informal risk capital market 
B)  Private venture capital companies 
C)  Small business investment companies 
D)  Public equity market 
A)  Informal risk capital market 
B)  Private venture capital companies 
C)  Small business investment companies 
D)  Public equity market

Question 13

Crowdfunding brings together various individuals who commit money to projects and companies they want to support.

Accepted Answer

A) True 
 B)False

Question 14

The three main advantages of going public are obtaining new capital,realizing an enhanced valuation,and enhancing the company's ability to obtain future funds.

Accepted Answer

A) True 
 B)False

Question 15

A prospectus is a letter from the SEC to a company indicating corrections that need to be made in their submitted material.

Accepted Answer

A) True 
 B)False

Question 16

In 2017,the largest percentage of venture capital dollars raised was invested in which stage of company development

Accepted Answer

A)  Early-stage 
B)  Seed-stage 
C)  Later-stage 
D)  Expansion-stage 
A)  Early-stage 
B)  Seed-stage 
C)  Later-stage 
D)  Expansion-stage

Question 17

The debt ratio is calculated by dividing total liabilities by total inventory.

Accepted Answer

A) True 
 B)False

Question 18

Which of the methods of valuation of a company provides the potential investor with the best estimate of the probable return on investment

Accepted Answer

A)  Book value 
B)  Earnings approach 
C)  Present value of future cash flows 
D)  Liquidation value 
A)  Book value 
B)  Earnings approach 
C)  Present value of future cash flows 
D)  Liquidation value

Question 19

Which factor in valuing your company is the most important

Accepted Answer

A)  Future earnings capacity 
B)  Book value 
C)  Outlook of the economy 
D)  Market price of similar companies' stocks 
A)  Future earnings capacity 
B)  Book value 
C)  Outlook of the economy 
D)  Market price of similar companies' stocks

Question 20

The due diligence phase of the venture-capital process includes:

Accepted Answer

A)  outlining the principle terms. 
B)  a detailed review of the company's history. 
C)  preparation of an investment memorandum. 
D)  a preliminary study of the business plan. 
A)  outlining the principle terms. 
B)  a detailed review of the company's history. 
C)  preparation of an investment memorandum. 
D)  a preliminary study of the business plan.

In a private venture capital firm,the ________ manages the fund in exchange for a management fee and a percentage of profits.

The private equity market provides capital for privately held ventures.

An extension of the earnings approach is the book value method.

Using the ________ method of evaluating the firm,cash flow is adjusted for the time value of money.

The industry sector receiving the largest share of venture capital in 2017 was in:

Balance sheet items are carried at cost,a good indicator of fair market value in valuing a company.

The least liquid current asset,________,is eliminated when calculating the acid test ratio.

Business angels usually find their deals through:

Blue-sky laws may speed up the process and lessen costs to the company going public.

The acid test ratio is a more rigorous test of the short-term liquidity of the venture as it eliminates inventory,which is the least liquid current asset.

Angel investors,family,and friends are often the source of funds in development financing.

Which type of risk-capital market is available as a stage one funding source only for high-potential ventures

Crowdfunding brings together various individuals who commit money to projects and companies they want to support.

The three main advantages of going public are obtaining new capital,realizing an enhanced valuation,and enhancing the company's ability to obtain future funds.

A prospectus is a letter from the SEC to a company indicating corrections that need to be made in their submitted material.

In 2017,the largest percentage of venture capital dollars raised was invested in which stage of company development

The debt ratio is calculated by dividing total liabilities by total inventory.

Which of the methods of valuation of a company provides the potential investor with the best estimate of the probable return on investment

Which factor in valuing your company is the most important

The due diligence phase of the venture-capital process includes:

The Entrepreneurial Mind-Set

Corporate Entrepreneurship

Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Protecting the Idea and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

The Financial Plan

Sources of Capital

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters

Exam 12: Informal Risk Capital, Venture Capital, and Going Public

In a private venture capital firm,the ________ manages the fund in exchange for a management fee and a percentage of profits.

The private equity market provides capital for privately held ventures.

An extension of the earnings approach is the book value method.

Using the ________ method of evaluating the firm,cash flow is adjusted for the time value of money.

The industry sector receiving the largest share of venture capital in 2017 was in:

Balance sheet items are carried at cost,a good indicator of fair market value in valuing a company.

The least liquid current asset,________,is eliminated when calculating the acid test ratio.

Business angels usually find their deals through:

Blue-sky laws may speed up the process and lessen costs to the company going public.

The acid test ratio is a more rigorous test of the short-term liquidity of the venture as it eliminates inventory,which is the least liquid current asset.

Angel investors,family,and friends are often the source of funds in development financing.

Which type of risk-capital market is available as a stage one funding source only for high-potential ventures

Crowdfunding brings together various individuals who commit money to projects and companies they want to support.

The three main advantages of going public are obtaining new capital,realizing an enhanced valuation,and enhancing the company's ability to obtain future funds.

A prospectus is a letter from the SEC to a company indicating corrections that need to be made in their submitted material.

In 2017,the largest percentage of venture capital dollars raised was invested in which stage of company development

The debt ratio is calculated by dividing total liabilities by total inventory.

Which of the methods of valuation of a company provides the potential investor with the best estimate of the probable return on investment

Which factor in valuing your company is the most important

The due diligence phase of the venture-capital process includes:

The Entrepreneurial Mind-Set

Corporate Entrepreneurship

Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Protecting the Idea and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

The Financial Plan

Sources of Capital

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters