Question 1

Although a board of directors has formal governance responsibilities, its most useful role is to provide guidance and support to the firm's managers.

Accepted Answer

A) True 
 B)False

Question 2

The term "liability of newness" refers to the fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firms lack "track records" with outside buyers and suppliers.

Accepted Answer

A) True 
 B)False

Question 3

In the context of boards of directors, a(n) ________ director is someone who is not employed by the firm.

Accepted Answer

A)  outside 
B)  inside 
C)  external 
D)  impartial 
E)  peripheral 
A)  outside 
B)  inside 
C)  external 
D)  impartial 
E)  peripheral

Question 4

Which of the following statements about advisory boards is incorrect?

Accepted Answer

A)  If a firm has a board of directors, it is not permitted to have an advisory board. 
B)  Many people are more willing to serve on a company's board of advisors than its board of directors because it requires less time and there is no potential legal liability involved. 
C)  Most boards of advisers have between 5 and 15 members. 
D)  A growing number of startups are forming advisory boards. 
E)  An advisory board can be established for general purposes or can be set up to address a specific issue or need. 
A)  If a firm has a board of directors, it is not permitted to have an advisory board. 
B)  Many people are more willing to serve on a company's board of advisors than its board of directors because it requires less time and there is no potential legal liability involved. 
C)  Most boards of advisers have between 5 and 15 members. 
D)  A growing number of startups are forming advisory boards. 
E)  An advisory board can be established for general purposes or can be set up to address a specific issue or need.

Question 5

The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm is called ________.

Accepted Answer

A)  linking 
B)  socializing 
C)  networking 
D)  associating 
E)  connecting 
A)  linking 
B)  socializing 
C)  networking 
D)  associating 
E)  connecting

Question 6

What is SCORE? What is its role in helping a firm fill out its new venture team?

Accepted Answer

SCORE is a nonprofit organization that p

Question 7

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 8

A(n) ________ is a person who works for a business as an apprentice or trainee for the purpose of obtaining actual experience.

Accepted Answer

A)  freelancer 
B)  consultant 
C)  intern 
D)  virtual assistant 
E)  novice 
A)  freelancer 
B)  consultant 
C)  intern 
D)  virtual assistant 
E)  novice

Question 9

Which of the following statements is untrue regarding founding teams?

Accepted Answer

A)  The members of heterogeneous teams are diverse in terms of their abilities and experiences. 
B)  The members of homogenous teams are very similar in terms of their abilities and experiences. 
C)  Teams that have worked together before have an edge. 
D)  Studies show that more than one individual starts 50 to 70 percent of all new firms. 
E)  It is generally believed that new ventures started by an individual have an advantage over new ventures started by a team. 
A)  The members of heterogeneous teams are diverse in terms of their abilities and experiences. 
B)  The members of homogenous teams are very similar in terms of their abilities and experiences. 
C)  Teams that have worked together before have an edge. 
D)  Studies show that more than one individual starts 50 to 70 percent of all new firms. 
E)  It is generally believed that new ventures started by an individual have an advantage over new ventures started by a team.

Question 10

Savanna Combs opened a clothing boutique two years ago. Unfortunately, the boutique failed after 18 months. Savanna attributes the failure of her boutique to the facts that her employees couldn't adjust quickly enough to their new roles and that her boutique lacked a "track record" with outside buyers and sellers, which made it difficult to form partnerships and make sales. Savanna suffered from what research calls the ________.

Accepted Answer

A)  burden of novelty 
B)  millstone of innovation 
C)  liability of newness 
D)  liability of preparedness 
E)  burden of newness 
A)  burden of novelty 
B)  millstone of innovation 
C)  liability of newness 
D)  liability of preparedness 
E)  burden of newness

Question 11

An advisory board can be established for general purposes or can be set up to address a specific need.

Accepted Answer

A) True 
 B)False

Question 12

Jason Andersen just finished writing a business plan for a new type of office supply store. One thing Jason included in the "Management Team & Company Structure" section of his business plan is a chart that depicts the most important skills that are needed for his business and where skills gaps exist. Jason included a(n)________ in his business plan.

Accepted Answer

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

Question 13

Which of the following statements is not true regarding the attributes of the founder(s) of a firm?

Accepted Answer

A)  Evidence suggests that important entrepreneurial skills are enhanced through higher education. 
B)  Founders with prior entrepreneurial experience are more likely to avoid costly mistakes. 
C)  Founders with experience in the same industry as their new ventures will typically have "blinders" on and are typically not as effective as founders new to the industry. 
D)  Founders with broad social and professional networks have an advantage. 
E)  New ventures that are started by a team rather than an individual have an advantage. 
A)  Evidence suggests that important entrepreneurial skills are enhanced through higher education. 
B)  Founders with prior entrepreneurial experience are more likely to avoid costly mistakes. 
C)  Founders with experience in the same industry as their new ventures will typically have "blinders" on and are typically not as effective as founders new to the industry. 
D)  Founders with broad social and professional networks have an advantage. 
E)  New ventures that are started by a team rather than an individual have an advantage.

Question 14

The members of heterogeneous teams are ________.

Accepted Answer

A)  diverse in terms of their abilities and experiences 
B)  diverse in terms of their abilities, but very similar in terms of their experiences 
C)  similar in terms of their abilities and experiences 
D)  diverse in terms of their experiences, but very similar in terms of their abilities 
E)  sometimes diverse in terms of their abilities and experiences and sometimes similar along the same dimensions 
A)  diverse in terms of their abilities and experiences 
B)  diverse in terms of their abilities, but very similar in terms of their experiences 
C)  similar in terms of their abilities and experiences 
D)  diverse in terms of their experiences, but very similar in terms of their abilities 
E)  sometimes diverse in terms of their abilities and experiences and sometimes similar along the same dimensions

Question 15

Which of the following statements is incorrect regarding founding teams?

Accepted Answer

A)  The members of heterogeneous teams are diverse in terms of their abilities and experiences. 
B)  Teams that are working together for the first time have an advantage over teams that have worked together before. 
C)  The psychological support that cofounders of a new business can offer one another is an important element of a firm's success. 
D)  The members of homogeneous teams are very similar in terms of their abilities and experiences. 
E)  Studies show that more than one individual starts 50 to 70 percent of all new teams. 
A)  The members of heterogeneous teams are diverse in terms of their abilities and experiences. 
B)  Teams that are working together for the first time have an advantage over teams that have worked together before. 
C)  The psychological support that cofounders of a new business can offer one another is an important element of a firm's success. 
D)  The members of homogeneous teams are very similar in terms of their abilities and experiences. 
E)  Studies show that more than one individual starts 50 to 70 percent of all new teams.

Question 16

A board of directors' three formal responsibilities are to appoint the officers of the firm, oversee the affairs of the corporation, and ________.

Accepted Answer

A)  conduct the annual meeting 
B)  provide funding for the firm 
C)  submit the firm's annual report to the stockholders 
D)  declare dividends 
E)  write the firm's strategic plan 
A)  conduct the annual meeting 
B)  provide funding for the firm 
C)  submit the firm's annual report to the stockholders 
D)  declare dividends 
E)  write the firm's strategic plan

Question 17

The fact that a corporation has a board of directors precludes it from having a board of advisors.

Accepted Answer

A) True 
 B)False

Question 18

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 startups 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 startups are forming advisory boards.

Question 19

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.

Accepted Answer

A) True 
 B)False

Question 20

The Partnering for Success feature in Chapter 9 focuses on a technique that entrepreneurs use to overcome the liabilities of newness. The suggestion made by the feature is to overcome the liabilities of newness by considering ________.

Accepted Answer

A)  interviewing a minimum of 20 startup founders to get a sense of what made them successful 
B)  working in the new product development or corporate innovation division of a major corporation 
C)  working for a startup for a minimum of two years before starting one 
D)  earning an MBA 
E)  joining a startup accelerator 
A)  interviewing a minimum of 20 startup founders to get a sense of what made them successful 
B)  working in the new product development or corporate innovation division of a major corporation 
C)  working for a startup for a minimum of two years before starting one 
D)  earning an MBA 
E)  joining a startup accelerator

Although a board of directors has formal governance responsibilities, its most useful role is to provide guidance and support to the firm's managers.

The term "liability of newness" refers to the fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firms lack "track records" with outside buyers and suppliers.

In the context of boards of directors, a(n) ________ director is someone who is not employed by the firm.

Which of the following statements about advisory boards is incorrect?

The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm is called ________.

What is SCORE? What is its role in helping a firm fill out its new venture team?

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

A(n) ________ is a person who works for a business as an apprentice or trainee for the purpose of obtaining actual experience.

Which of the following statements is untrue regarding founding teams?

An advisory board can be established for general purposes or can be set up to address a specific need.

Which of the following statements is not true regarding the attributes of the founder(s) of a firm?

The members of heterogeneous teams are ________.

Which of the following statements is incorrect regarding founding teams?

A board of directors' three formal responsibilities are to appoint the officers of the firm, oversee the affairs of the corporation, and ________.

The fact that a corporation has a board of directors precludes it from having a board of advisors.

Which of the following statements about advisory boards is incorrect?

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.

The Partnering for Success feature in Chapter 9 focuses on a technique that entrepreneurs use to overcome the liabilities of newness. The suggestion made by the feature is to overcome the liabilities of newness by considering ________.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

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

Although a board of directors has formal governance responsibilities, its most useful role is to provide guidance and support to the firm's managers.

The term "liability of newness" refers to the fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firms lack "track records" with outside buyers and suppliers.

In the context of boards of directors, a(n) ________ director is someone who is not employed by the firm.

Which of the following statements about advisory boards is incorrect?

The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm is called ________.

What is SCORE? What is its role in helping a firm fill out its new venture team?

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

A(n) ________ is a person who works for a business as an apprentice or trainee for the purpose of obtaining actual experience.

Which of the following statements is untrue regarding founding teams?

An advisory board can be established for general purposes or can be set up to address a specific need.

Which of the following statements is not true regarding the attributes of the founder(s) of a firm?

The members of heterogeneous teams are ________.

Which of the following statements is incorrect regarding founding teams?

A board of directors' three formal responsibilities are to appoint the officers of the firm, oversee the affairs of the corporation, and ________.

The fact that a corporation has a board of directors precludes it from having a board of advisors.

Which of the following statements about advisory boards is incorrect?

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.

The Partnering for Success feature in Chapter 9 focuses on a technique that entrepreneurs use to overcome the liabilities of newness. The suggestion made by the feature is to overcome the liabilities of newness by considering ________.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Developing an Effective Business Model

Industry and Competitor Analysis

Writing a Business Plan

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