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

Which section of the business plan is used for initial screening and provides the starting point for the venture-capital process

________ crowdfunding sites allow individuals to invest in private companies for a percentage share of the company.

Venture capitalists:

Many times Internet companies are valued according to the number of users they have and the data that is generated such as page views and unique visitors.

Venture capital firms prefer to invest in:

A venture capitalist would rather invest in a first-rate product and a second-rate management team than the reverse.

To succeed in crowdfunding,you need to develop a solid marketing campaign,carefully execute the campaign and provide excellent service.

With the enactment of the Sarbanes-Oxley Act in 2002,the expense and administrative responsibilities of being a public company,as well as the liability risks of officers and directors,are significantly greater.

Of the eight factors usually considered when valuing the venture,provide four of them along with a sentence of explanation for each factor you provide.

Expansion or development financing is easier to obtain than early-stage financing.

The factor approach:

Which of the following industries is not an area of interest for informal investors

On a reward-based crowdfunding site,individuals pledge money to a company that might be developing a new technology or product,a new cultural art project,or a new musical album.

For the venture capitalist,the executive summary is an important part of the business plan.

The current ratio is used to measure the long-term solvency of the venture and its ability to meet short-term debts.