Exam 10: Getting Financing or Funding

The Partnering for Success feature in Chapter 10 provides advice for navigating the tricky process of raising money. The main piece of advice given in the feature is to:

Historically, commercial banks have not been viewed as a practical source of financing for startup firms.

Very few founders contribute personal funds to their ventures.

According to the textbook, the unique value provided by business angels is:

Angel investors, private placement, venture capital, and initial public offerings are the most common sources of equity funding.

The main difference between the SBIR and the STTR programs is that the STTR program requires the participation of:

The SBIR is a ________, meaning that firms that qualify have the potential to receive more than one grant to fund a particular proposal.

There are two major advantages of getting a loan vs. investment capital:

Peter Simmons owns an electronic games company. Although Peter's game designers and programmers are very good, it takes 2-3 years to develop a good electronic game. This example illustrates the need for funding or financing referred to as:

There are two common types of loans:

The ________ is a competitive grant program that provides over $1 billion per year to small businesses for early-state and development projects.

Tim Graham's startup, which is in the electronics industry, was launched on January 1, 2009. However, prior to its formal launch, Tim spent many hours working on his business, particularly during the feasibility analysis stage. The time and effort that entrepreneurs put into their venture, that can't be easily measured from a financial point of view, is referred to as:

Venture capitalists are individuals who invest their personal capital directly in start-ups.

Which of the following set of characteristics places a startup in the strongest position to apply for equity funding?

The percentage of the profits the venture capitalist gets is called the "hire."

Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.

Once a venture capitalist makes an investment in a firm, subsequent investments are made in rounds and are referred to as:

For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

According to the textbook, beyond their own funds, the second source of funds for many new ventures is:

Which of the following statements is incorrect regarding equity funding?