Question 1

The ideal candidate for a bank loan is a firm with weak cash flow, high leverage, low to moderate growth and unproven management.

Accepted Answer

A) True 
 B)False

Question 2

The three primary reasons startups need funding are ________.

Accepted Answer

A)  cash flow challenges, capital investments, and lengthy product development cycles 
B)  business research, cash flow challenges, and costs associated with building a brand 
C)  bonuses for members of the new venture team, attorney fees, and lengthy product development cycles 
D)  attorney fees, capital investments, and marketing research 
E)  bonuses for members of the new venture team, marketing research, and personnel costs 
A)  cash flow challenges, capital investments, and lengthy product development cycles 
B)  business research, cash flow challenges, and costs associated with building a brand 
C)  bonuses for members of the new venture team, attorney fees, and lengthy product development cycles 
D)  attorney fees, capital investments, and marketing research 
E)  bonuses for members of the new venture team, marketing research, and personnel costs

Question 3

What is a business angel? Describe the prototypical business angel. How much money do business angels typically invest in a single company?

Accepted Answer

Business angels are individuals who inve

Question 4

What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

Accepted Answer

Equity funding means exchanging partial

Question 5

Venture capital is money that is invested by venture capital firms in startups and small businesses with exceptional growth potential.

Accepted Answer

A) True 
 B)False

Question 6

A(n) ________ bank is an institution, such as Credit Suisse First Boston, that acts as an underwriter or agent for a firm engaged in an initial public offering.

Accepted Answer

A)  venture 
B)  statutory 
C)  fiduciary 
D)  investment 
E)  public 
A)  venture 
B)  statutory 
C)  fiduciary 
D)  investment 
E)  public

Question 7

The SBIR and STTR programs provide entrepreneurs access to mentors, advisors and potential investors rather than cash.

Accepted Answer

A) True 
 B)False

Question 8

________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

Accepted Answer

A)  Factoring 
B)  Vendor credit 
C)  Peer-to-peer lending 
D)  Crowdfunding 
E)  Leasing 
A)  Factoring 
B)  Vendor credit 
C)  Peer-to-peer lending 
D)  Crowdfunding 
E)  Leasing

Question 9

Equity investors typically have a ________ year investment horizon.

Accepted Answer

A)  1 to 3 
B)  2 to 4 
C)  3 to 5 
D)  4 to 6 
E)  5 to 7 
A)  1 to 3 
B)  2 to 4 
C)  3 to 5 
D)  4 to 6 
E)  5 to 7

Question 10

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

Accepted Answer

A)  later funding 
B)  successive funding 
C)  subsequent backing 
D)  follow-on funding 
E)  ensuing backing 
A)  later funding 
B)  successive funding 
C)  subsequent backing 
D)  follow-on funding 
E)  ensuing backing

Question 11

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

Accepted Answer

A)  two 
B)  three 
C)  six 
D)  nine 
E)  twelve 
A)  two 
B)  three 
C)  six 
D)  nine 
E)  twelve

Question 12

Which of the following is not a source of equity funding?

Accepted Answer

A)  Initial public offering 
B)  Angel investors 
C)  Private placement 
D)  Venture capital 
E)  Government grants 
A)  Initial public offering 
B)  Angel investors 
C)  Private placement 
D)  Venture capital 
E)  Government grants

Question 13

The two major advantages of getting a loan versus investment capital are ________.

Accepted Answer

A)  the money doesn't have to be paid back and lenders typically take an active interest in their borrowers 
B)  banks are reliable sources of funding for startups and interest payments are tax deductible 
C)  the money doesn't have to be paid back and no ownership in the firm is surrendered 
D)  no ownership in the firm is surrendered and interest payments are tax deductible 
E)  banks are reliable sources of funding for startups and lenders typically take an active interest in borrowers 
A)  the money doesn't have to be paid back and lenders typically take an active interest in their borrowers 
B)  banks are reliable sources of funding for startups and interest payments are tax deductible 
C)  the money doesn't have to be paid back and no ownership in the firm is surrendered 
D)  no ownership in the firm is surrendered and interest payments are tax deductible 
E)  banks are reliable sources of funding for startups and lenders typically take an active interest in borrowers

Question 14

Historically, commercial banks have been viewed as an excellent source of financing for startup firms.

Accepted Answer

A) True 
 B)False

Question 15

The ________ Program is a competitive grant program that provides over $2.5 billion per year to small businesses for early-state and development projects.

Accepted Answer

A)  SBTA 
B)  SBIR 
C)  SBAP 
D)  SAIR 
E)  SBTR 
A)  SBTA 
B)  SBIR 
C)  SBAP 
D)  SAIR 
E)  SBTR

Question 16

Typically, the seed money that gets a company off the ground comes from a commercial bank.

Accepted Answer

A) True 
 B)False

Question 17

Venture capital involves getting a loan or selling corporate bonds.

Accepted Answer

A) True 
 B)False

Question 18

Debt financing involves ________.

Accepted Answer

A)  raising venture capital or securing a private placement 
B)  selling corporate bonds or selling stock via an IPO 
C)  getting a grant or selling corporate bonds 
D)  getting a loan or raising venture capital 
E)  getting a loan or selling corporate bonds 
A)  raising venture capital or securing a private placement 
B)  selling corporate bonds or selling stock via an IPO 
C)  getting a grant or selling corporate bonds 
D)  getting a loan or raising venture capital 
E)  getting a loan or selling corporate bonds

Question 19

According to our textbook, the seed money that gets a company off the ground typically comes from ________.

Accepted Answer

A)  angel investors 
B)  venture capitalists 
C)  commercial banks 
D)  governmental agencies 
E)  the founders of the firm 
A)  angel investors 
B)  venture capitalists 
C)  commercial banks 
D)  governmental agencies 
E)  the founders of the firm

Question 20

Bootstrapping is the process of combining personal funds, equity investments, and bank financing to launch a business.

Accepted Answer

A) True 
 B)False

The ideal candidate for a bank loan is a firm with weak cash flow, high leverage, low to moderate growth and unproven management.

The three primary reasons startups need funding are ________.

What is a business angel? Describe the prototypical business angel. How much money do business angels typically invest in a single company?

What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

Venture capital is money that is invested by venture capital firms in startups and small businesses with exceptional growth potential.

A(n) ________ bank is an institution, such as Credit Suisse First Boston, that acts as an underwriter or agent for a firm engaged in an initial public offering.

The SBIR and STTR programs provide entrepreneurs access to mentors, advisors and potential investors rather than cash.

________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

Equity investors typically have a ________ year investment horizon.

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

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

Which of the following is not a source of equity funding?

The two major advantages of getting a loan versus investment capital are ________.

Historically, commercial banks have been viewed as an excellent source of financing for startup firms.

The ________ Program is a competitive grant program that provides over $2.5 billion per year to small businesses for early-state and development projects.

Typically, the seed money that gets a company off the ground comes from a commercial bank.

Venture capital involves getting a loan or selling corporate bonds.

Debt financing involves ________.

According to our textbook, the seed money that gets a company off the ground typically comes from ________.

Bootstrapping is the process of combining personal funds, equity investments, and bank financing to launch a business.

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

Building a New-Venture Team

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Exam 10: Getting Financing or Funding

The ideal candidate for a bank loan is a firm with weak cash flow, high leverage, low to moderate growth and unproven management.

The three primary reasons startups need funding are ________.

What is a business angel? Describe the prototypical business angel. How much money do business angels typically invest in a single company?

What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

Venture capital is money that is invested by venture capital firms in startups and small businesses with exceptional growth potential.

A(n) ________ bank is an institution, such as Credit Suisse First Boston, that acts as an underwriter or agent for a firm engaged in an initial public offering.

The SBIR and STTR programs provide entrepreneurs access to mentors, advisors and potential investors rather than cash.

________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

Equity investors typically have a ________ year investment horizon.

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

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

Which of the following is not a source of equity funding?

The two major advantages of getting a loan versus investment capital are ________.

Historically, commercial banks have been viewed as an excellent source of financing for startup firms.

The ________ Program is a competitive grant program that provides over $2.5 billion per year to small businesses for early-state and development projects.

Typically, the seed money that gets a company off the ground comes from a commercial bank.

Venture capital involves getting a loan or selling corporate bonds.

Debt financing involves ________.

According to our textbook, the seed money that gets a company off the ground typically comes from ________.

Bootstrapping is the process of combining personal funds, equity investments, and bank financing to launch a business.

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

Building a New-Venture Team

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters