Question 1

The three common sources of "personal" financing for a startup firm are personal funds, friends and family, and bootstrapping.

Accepted Answer

A) True 
 B)False

Question 2

Kickstarter, Indiegogo and RocketHub are examples of equity-based crowdfunding sites.

Accepted Answer

A) True 
 B)False

Question 3

According to the textbook, many entrepreneurs go about the task of raising capital haphazardly because they ________.

Accepted Answer

A)  are uncomfortable talking about money and they haven't written a business plan 
B)  lack experience in this area and because they don't know much about their choices 
C)  are focused on the nuts and bolts of starting their business 
D)  haven't completed a feasibility analysis or business plan 
E)  are intimidated by the process and they are unsure of how much money they need 
A)  are uncomfortable talking about money and they haven't written a business plan 
B)  lack experience in this area and because they don't know much about their choices 
C)  are focused on the nuts and bolts of starting their business 
D)  haven't completed a feasibility analysis or business plan 
E)  are intimidated by the process and they are unsure of how much money they need

Question 4

Approximately 50 percent of the 9,000 banks in the United States participate in the SBA Guaranteed Loan Program.

Accepted Answer

A) True 
 B)False

Question 5

The two types of crowdfunding sites are ________-based and ________-based.

Accepted Answer

A)  rewards; equity 
B)  equity; debt 
C)  expectations; performance 
D)  private; nonprivate 
E)  domestic; international 
A)  rewards; equity 
B)  equity; debt 
C)  expectations; performance 
D)  private; nonprivate 
E)  domestic; international

Question 6

A lease is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

Accepted Answer

A) True 
 B)False

Question 7

The major advantage of leasing is that ________.

Accepted Answer

A)  it enables a company to have access to average or above average facilities and equipment 
B)  it enables a company to acquire the use of assets with little or no down payment 
C)  it is cheaper in the long run than purchasing 
D)  a lease agreement is easier to negotiate than a purchase agreement 
E)  it is easier to obtain credit on a lease than a purchase 
A)  it enables a company to have access to average or above average facilities and equipment 
B)  it enables a company to acquire the use of assets with little or no down payment 
C)  it is cheaper in the long run than purchasing 
D)  a lease agreement is easier to negotiate than a purchase agreement 
E)  it is easier to obtain credit on a lease than a purchase

Question 8

Which of the following statements is incorrect regarding equity funding?

Accepted Answer

A)  Equity investors expect to get their money back, along with a substantial capital gain, through the sale of their stock. 
B)  Angel investors are a common source of equity funding. 
C)  Equity funding is not a loan. 
D)  Equity investors are very demanding. 
E)  Equity investors fund the majority of the plans they consider. 
A)  Equity investors expect to get their money back, along with a substantial capital gain, through the sale of their stock. 
B)  Angel investors are a common source of equity funding. 
C)  Equity funding is not a loan. 
D)  Equity investors are very demanding. 
E)  Equity investors fund the majority of the plans they consider.

Question 9

The vast majority of founders contribute personal funds along with sweat equity to their ventures.

Accepted Answer

A) True 
 B)False

Question 10

In 2013, venture capital firms funded just over ________ deals.

Accepted Answer

A)  800 
B)  2,600 
C)  4,000 
D)  6,200 
E)  8,000 
A)  800 
B)  2,600 
C)  4,000 
D)  6,200 
E)  8,000

Question 11

According to the textbook, the unique value provided by business angels is they ________.

Accepted Answer

A)  are willing to make relatively large investments 
B)  are willing to make relatively small investments 
C)  require a fairly low rate of return on their money 
D)  invest money but typically don't take a seat on a company's board of directors 
E)  are easy to find 
A)  are willing to make relatively large investments 
B)  are willing to make relatively small investments 
C)  require a fairly low rate of return on their money 
D)  invest money but typically don't take a seat on a company's board of directors 
E)  are easy to find

Question 12

Steven and Emily Campbell are planning to open a casual dining restaurant in downtown Akron, Ohio, and need $125,000 to get started. They have $50,000 of their own money, which leaves $75,000. After getting turned down by a couple of banks, they decided to turn to their relatives and acquaintances for help. Fortunately, they were able to raise the money through a gift from Steven's grandfather, a loan from Emily's parents, and a small investment by Steven's best friend in college, Doug. The money that an entrepreneur raises in this manner is referred to as ________.

Accepted Answer

A)  friends and family 
B)  bootstrapping 
C)  networking money 
D)  compassion money 
E)  legacy money 
A)  friends and family 
B)  bootstrapping 
C)  networking money 
D)  compassion money 
E)  legacy money

Question 13

Factoring 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) True 
 B)False

Question 14

Which "phase" of the SBIR Program is a six-month feasibility study in which the recipient must demonstrate the technical feasibility of the proposed innovation?

Accepted Answer

A)  Phase I 
B)  Phase II 
C)  Phase III 
D)  Phase V 
E)  Phase X 
A)  Phase I 
B)  Phase II 
C)  Phase III 
D)  Phase V 
E)  Phase X

Question 15

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?

Accepted Answer

A)  Lengthy product development cycles 
B)  Costs associated with building a brand 
C)  Cash flow challenges 
D)  Capital investments 
E)  Personnel costs 
A)  Lengthy product development cycles 
B)  Costs associated with building a brand 
C)  Cash flow challenges 
D)  Capital investments 
E)  Personnel costs

The three common sources of "personal" financing for a startup firm are personal funds, friends and family, and bootstrapping.

Kickstarter, Indiegogo and RocketHub are examples of equity-based crowdfunding sites.

According to the textbook, many entrepreneurs go about the task of raising capital haphazardly because they ________.

Approximately 50 percent of the 9,000 banks in the United States participate in the SBA Guaranteed Loan Program.

The two types of crowdfunding sites are -based and -based.

A lease is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

The major advantage of leasing is that ________.

Which of the following statements is incorrect regarding equity funding?

The vast majority of founders contribute personal funds along with sweat equity to their ventures.

In 2013, venture capital firms funded just over ________ deals.

According to the textbook, the unique value provided by business angels is they ________.

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

Which "phase" of the SBIR Program is a six-month feasibility study in which the recipient must demonstrate the technical feasibility of the proposed innovation?

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?

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 three common sources of "personal" financing for a startup firm are personal funds, friends and family, and bootstrapping.

Kickstarter, Indiegogo and RocketHub are examples of equity-based crowdfunding sites.

According to the textbook, many entrepreneurs go about the task of raising capital haphazardly because they ________.

Approximately 50 percent of the 9,000 banks in the United States participate in the SBA Guaranteed Loan Program.

The two types of crowdfunding sites are ________-based and ________-based.

A lease is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

The major advantage of leasing is that ________.

Which of the following statements is incorrect regarding equity funding?

The vast majority of founders contribute personal funds along with sweat equity to their ventures.

In 2013, venture capital firms funded just over ________ deals.

According to the textbook, the unique value provided by business angels is they ________.

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

Which "phase" of the SBIR Program is a six-month feasibility study in which the recipient must demonstrate the technical feasibility of the proposed innovation?

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?

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

The two types of crowdfunding sites are -based and -based.