Question 1

Which of the following statements about advisory boards is incorrect?

Accepted Answer

A)  The fact that a corporation has a board of directors does not preclude it from establishing one or more advisory boards. 
B)  An advisory board can be established for general purposes or can be set up to address a specific issue or need. 
C)  Similar to a board of directors, an advisory board has legal responsibility for the firm in certain areas. 
D)  An advisory board is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis. 
E)  A growing number of start-ups are forming advisory boards. 
A)  The fact that a corporation has a board of directors does not preclude it from establishing one or more advisory boards. 
B)  An advisory board can be established for general purposes or can be set up to address a specific issue or need. 
C)  Similar to a board of directors, an advisory board has legal responsibility for the firm in certain areas. 
D)  An advisory board is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis. 
E)  A growing number of start-ups are forming advisory boards. C

Question 2

According to the textbook, studies show that more than one individual starts ________ of all new firms.

Accepted Answer

A)  20 to 25 percent 
B)  50 to 70 percent 
C)  5 to 15 percent 
D)  30 to 40 percent 
E)  75 to 90 percent 
A)  20 to 25 percent 
B)  50 to 70 percent 
C)  5 to 15 percent 
D)  30 to 40 percent 
E)  75 to 90 percent B

Question 3

Unigo, the company profiled in the opening feature for Chapter 9, is an online college guide. One attribute that Unigo's founder, Jordan Goldman, has that has served him well in building Unigo is:

Accepted Answer

A)  he is a good networker 
B)  he has substantial prior entrepreneurial experience 
C)  he has been a college administrator 
D)  he has a PhD in management 
E)  he has substantial marketing experience 
A)  he is a good networker 
B)  he has substantial prior entrepreneurial experience 
C)  he has been a college administrator 
D)  he has a PhD in management 
E)  he has substantial marketing experience A

Question 4

In the context of boards of directors, a ________ is a person who is also an officer of the firm.

Accepted Answer

A)  outside director 
B)  junior director 
C)  inside director 
D)  expert director 
E)  senior director 
A)  outside director 
B)  junior director 
C)  inside director 
D)  expert director 
E)  senior director

Question 5

Describe the term "liability of newness" and suggest several ways that a new venture can overcome this handicap.

Accepted Answer

The term "liability of newness" refers t

Question 6

According to the textbook, prior entrepreneurial experiences:

Accepted Answer

A)  is one of the poorest predictors of future entrepreneurial performance 
B)  is one of the most consistent predictors of future entrepreneurial performance for entrepreneurs under 50 years of age but not for entrepreneurs over 50 years of age 
C)  is one of the most consistent predictors of future entrepreneurial performance 
D)  is one of the most consistent predictors of future entrepreneurial performance in service firms but not in manufacturing firms 
E)  has no relationship to future entrepreneurial performance 
A)  is one of the poorest predictors of future entrepreneurial performance 
B)  is one of the most consistent predictors of future entrepreneurial performance for entrepreneurs under 50 years of age but not for entrepreneurs over 50 years of age 
C)  is one of the most consistent predictors of future entrepreneurial performance 
D)  is one of the most consistent predictors of future entrepreneurial performance in service firms but not in manufacturing firms 
E)  has no relationship to future entrepreneurial performance

Question 7

Doris Harrison is in the process of launching a financial services firm. She plans to incorporate the firm. Because the firm will be incorporated, Doris is legally required to have a:

Accepted Answer

A)  board of investors 
B)  board of advisors 
C)  customer advisory board 
D)  board of directors 
E)  panel of advisors and peers 
A)  board of investors 
B)  board of advisors 
C)  customer advisory board 
D)  board of directors 
E)  panel of advisors and peers

Question 8

Networking is building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to a firm.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following was not identified in the textbook as an attribute of an effective board member?

Accepted Answer

A)  strong personal and professional networks 
B)  unknown in their field 
C)  investment and/or operating experience 
D)  ability and willingness to mentor the CEO and the top managers of the firm 
E)  pattern recognition skills 
A)  strong personal and professional networks 
B)  unknown in their field 
C)  investment and/or operating experience 
D)  ability and willingness to mentor the CEO and the top managers of the firm 
E)  pattern recognition skills

Question 10

Which of the following qualities was not identified in the textbook as a preferred attribute of the founder or founders of a firm?

Accepted Answer

A)  prior entrepreneurial experience 
B)  firm started by a team 
C)  relevant industry experience 
D)  prior experience working in a government or university position 
E)  higher education 
A)  prior entrepreneurial experience 
B)  firm started by a team 
C)  relevant industry experience 
D)  prior experience working in a government or university position 
E)  higher education

Question 11

James Williams is the Chief Operating Officer of a startup in the health food industry. He is also a member of his firm's board of directors. In board of directors terminology James is an:

Accepted Answer

A)  inside director 
B)  outside director 
C)  expert director 
D)  junior director 
E)  senior director 
A)  inside director 
B)  outside director 
C)  expert director 
D)  junior director 
E)  senior director

Question 12

Homogeneous teams are diverse in terms of their abilities and experiences.

Accepted Answer

A) True 
 B)False

Question 13

A skills profile is a chart that depicts the:

Accepted Answer

A)  preferable skills and abilities of the members of a firm's board of advisors 
B)  preferable skills and abilities of the members of a firm's board of directors 
C)  most important skills that are needed in a business startup and where skill gaps exist 
D)  skills and abilities that will be needed for a firm to maintain an aggressive growth strategy 
E)  the skills of a company's customers and how those skills impact the product and services a company provides 
A)  preferable skills and abilities of the members of a firm's board of advisors 
B)  preferable skills and abilities of the members of a firm's board of directors 
C)  most important skills that are needed in a business startup and where skill gaps exist 
D)  skills and abilities that will be needed for a firm to maintain an aggressive growth strategy 
E)  the skills of a company's customers and how those skills impact the product and services a company provides

Question 14

Melissa Jones just launched a firm in the wireless communications industry. Shortly after the company was launched, Melissa announced that a prominent Silicon Valley venture capitalist had agreed to serve on her board of directors. Melissa knows that such a high quality appointment will send an important message to her potential business partners and clientele. This phenomenon is referred to as:

Accepted Answer

A)  trumping 
B)  championing 
C)  profiling 
D)  signaling 
E)  indicating 
A)  trumping 
B)  championing 
C)  profiling 
D)  signaling 
E)  indicating

Question 15

The What Went Wrong feature in Chapter 9 focuses on Monitor110, a 2005 startup that helped hedge fund managers and professional investors make better investment decisions . According to the feature, Monitor110's failure is an example of how a lack of ________ and ________ can damage a new venture team.

Accepted Answer

A)  teamwork, a well-qualified board of directors 
B)  money, a highly motivated new venture team 
C)  industry experience, prior entrepreneurial experience 
D)  good legal advice, industry experience 
E)  consensus, a clear leader 
A)  teamwork, a well-qualified board of directors 
B)  money, a highly motivated new venture team 
C)  industry experience, prior entrepreneurial experience 
D)  good legal advice, industry experience 
E)  consensus, a clear leader

Question 16

Amy Phillips founded a cosmetics firm several years ago. Her firm has grown rapidly and is financially successful. One thing that Amy attributes her success to is that early on she assembled a panel of experts who provided her ongoing direction and advice about her business. What Amy created is called an:

Accepted Answer

A)  consultation panel 
B)  suggestion panel 
C)  idea board 
D)  accountability panel 
E)  advisory board 
A)  consultation panel 
B)  suggestion panel 
C)  idea board 
D)  accountability panel 
E)  advisory board

Question 17

Which of the following statements is incorrect regarding boards of directors?

Accepted Answer

A)  If a new venture organizes as a corporation, it is not legally required to have a board of directors, but it is strongly recommended. 
B)  A board is typically made up of both inside and outside directors. 
C)  The board is responsible for declaring dividends. 
D)  Most boards meet formally three or four times a year. 
E)  The boards for publicly traded companies are required by law to have audit and compensation committees. 
A)  If a new venture organizes as a corporation, it is not legally required to have a board of directors, but it is strongly recommended. 
B)  A board is typically made up of both inside and outside directors. 
C)  The board is responsible for declaring dividends. 
D)  Most boards meet formally three or four times a year. 
E)  The boards for publicly traded companies are required by law to have audit and compensation committees.

Question 18

A board of directors has three formal responsibilities:

Accepted Answer

A)  periodically update the firm's business plan, declare dividends, and write the firm's marketing plan 
B)  appoint the officers of the firm, declare dividends, and oversee the affairs of the corporation 
C)  write the firm's strategic plan, declare dividends, and conduct the annual meeting 
D)  appoint the officers of the firm, conduct the annual meeting, and submit the firm's annual report to the Securities & Exchange Commission 
E)  provide funding to the firm, write the firm's strategic plan, and submit the firm's annual report to the Securities & Exchange Commission 
A)  periodically update the firm's business plan, declare dividends, and write the firm's marketing plan 
B)  appoint the officers of the firm, declare dividends, and oversee the affairs of the corporation 
C)  write the firm's strategic plan, declare dividends, and conduct the annual meeting 
D)  appoint the officers of the firm, conduct the annual meeting, and submit the firm's annual report to the Securities & Exchange Commission 
E)  provide funding to the firm, write the firm's strategic plan, and submit the firm's annual report to the Securities & Exchange Commission

Question 19

Keith Barnes is a general partner in a venture capital firm that just funded South Florida Software, a software firm in Coral Gables, Florida. South Florida Software is incorporated, and Keith has taken a seat on the firm's board of directors. In board of directors terminology Keith is an:

Accepted Answer

A)  subordinate director 
B)  senior director 
C)  distant director 
D)  inside director 
E)  outside director 
A)  subordinate director 
B)  senior director 
C)  distant director 
D)  inside director 
E)  outside director

Question 20

A(n) ________ is a chart that depicts the most important skills that are needed in a new venture and where skills gaps exist.

Accepted Answer

A)  expertise report 
B)  talent profile 
C)  abilities summary 
D)  skills profile 
E)  talent summary 
A)  expertise report 
B)  talent profile 
C)  abilities summary 
D)  skills profile 
E)  talent summary

Which of the following statements about advisory boards is incorrect?

According to the textbook, studies show that more than one individual starts ________ of all new firms.

Unigo, the company profiled in the opening feature for Chapter 9, is an online college guide. One attribute that Unigo's founder, Jordan Goldman, has that has served him well in building Unigo is:

In the context of boards of directors, a ________ is a person who is also an officer of the firm.

Describe the term "liability of newness" and suggest several ways that a new venture can overcome this handicap.

According to the textbook, prior entrepreneurial experiences:

Doris Harrison is in the process of launching a financial services firm. She plans to incorporate the firm. Because the firm will be incorporated, Doris is legally required to have a:

Networking is building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to a firm.

Which of the following was not identified in the textbook as an attribute of an effective board member?

Which of the following qualities was not identified in the textbook as a preferred attribute of the founder or founders of a firm?

James Williams is the Chief Operating Officer of a startup in the health food industry. He is also a member of his firm's board of directors. In board of directors terminology James is an:

Homogeneous teams are diverse in terms of their abilities and experiences.

A skills profile is a chart that depicts the:

The What Went Wrong feature in Chapter 9 focuses on Monitor110, a 2005 startup that helped hedge fund managers and professional investors make better investment decisions . According to the feature, Monitor110's failure is an example of how a lack of and can damage a new venture team.

Which of the following statements is incorrect regarding boards of directors?

A board of directors has three formal responsibilities:

Keith Barnes is a general partner in a venture capital firm that just funded South Florida Software, a software firm in Coral Gables, Florida. South Florida Software is incorporated, and Keith has taken a seat on the firm's board of directors. In board of directors terminology Keith is an:

A(n) ________ is a chart that depicts the most important skills that are needed in a new venture and where skills gaps exist.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's Financial Strength and Viability

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Exam 9: Building a New Venture Team

Which of the following statements about advisory boards is incorrect?

According to the textbook, studies show that more than one individual starts ________ of all new firms.

Unigo, the company profiled in the opening feature for Chapter 9, is an online college guide. One attribute that Unigo's founder, Jordan Goldman, has that has served him well in building Unigo is:

In the context of boards of directors, a ________ is a person who is also an officer of the firm.

Describe the term "liability of newness" and suggest several ways that a new venture can overcome this handicap.

According to the textbook, prior entrepreneurial experiences:

Doris Harrison is in the process of launching a financial services firm. She plans to incorporate the firm. Because the firm will be incorporated, Doris is legally required to have a:

Networking is building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to a firm.

Which of the following was not identified in the textbook as an attribute of an effective board member?

Which of the following qualities was not identified in the textbook as a preferred attribute of the founder or founders of a firm?

James Williams is the Chief Operating Officer of a startup in the health food industry. He is also a member of his firm's board of directors. In board of directors terminology James is an:

Homogeneous teams are diverse in terms of their abilities and experiences.

A skills profile is a chart that depicts the:

Which of the following statements is incorrect regarding boards of directors?

A board of directors has three formal responsibilities:

Keith Barnes is a general partner in a venture capital firm that just funded South Florida Software, a software firm in Coral Gables, Florida. South Florida Software is incorporated, and Keith has taken a seat on the firm's board of directors. In board of directors terminology Keith is an:

A(n) ________ is a chart that depicts the most important skills that are needed in a new venture and where skills gaps exist.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Assessing a New Venture's Financial Strength and Viability

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters