Question 1

What is the average amount of a microenterprise loan through the Grameen Bank?

Accepted Answer

A)   $150
B)   $149
C)   $420
D)   $530
E)   $670 B

Question 2

The expected internal rate of return or IRR (compound annual return on investment) is calculated from the expected payback time and the times return for formal investors and entrepreneurs who reported both.

Accepted Answer

A) True 
 B)False  True

Question 3

What category of venture capital participant employs gatekeepers to advise it on what projects to invest in and to monitor the investment afterwards?

Accepted Answer

A)   General partners.
B)   Limited partners.
C)   Investment advisors.
D)   All of the above.
E)   None of the above. B

Question 4

The limited partners of venture capital funds raise money from the general partners.

Accepted Answer

A) True 
 B)False

Question 5

In general, venture capital is invested in companies that are already in business.

Accepted Answer

A) True 
 B)False

Question 6

For informal investment, the amount invested by _______ is the highest, and the median return expected is ____ times the original investment.

Accepted Answer

A)   Strangers; 1.5
B)   Friends; 2.0
C)   Venture Capitalists; 1.0
D)   Relatives; 1.0
E)   Work Colleagues; 1.5

Question 7

Since the mid-1990s, venture capital grew rapidly, and most nations were striving to emulate the classic venture capital model of which country?

Accepted Answer

A)   India
B)   Japan
C)   The U.S.
D)   China
E)   None of the above.

Question 8

What subset of informal investor is relatively sophisticated and invests primarily in glamorous companies?

Accepted Answer

A)   Friends
B)   Family
C)   Founders
D)   Financial advisors
E)   Business angels

Question 9

Which of the following categories of informal investors expects the highest return on his or her investment, since it is made in a more detached manner?

Accepted Answer

A)   Founders.
B)   Family.
C)   Friends.
D)   Foolhardy investors.
E)   All of the above expect the same returns.

Question 10

According to Figure 9.5, an R2 of 0.86 indicates that 86% of the variation in annual amount per informal investor is explained by:

Accepted Answer

A)   amount of startup funding
B)   total entrepreneurial activity (TE
A)  
C)   Income per capita
D)   GDP per capita
E)   Expected IRR

Question 11

Most business angel networks in developed nations look for high-potential startups that have prospects of growing into substantial enterprises.

Accepted Answer

A) True 
 B)False

Question 12

The median expected payback time of an investment is one year, and the median amount returned is two times the original investment.

Accepted Answer

A) True 
 B)False

Question 13

If a venture capital fund is successful, as measured by the financial return to the limited partners, the general partners usually raise another fund ______ years later.

Accepted Answer

A)   1 - 3 years
B)   4 - 6 years
C)   7 - 9 years
D)   10 - 12 years
E)   13 - 16 years

Question 14

The rarest source of capital for nascent entrepreneurs is______.

Accepted Answer

A)   friends
B)   family
C)   venture capital
D)   financial advisors
E)   foolhardy investors

Question 15

Using GEM data for the United States, we can point out that the informal investor prevalence rate among entrepreneurs is much higher than the rate among non-entrepreneurs.

Accepted Answer

A) True 
 B)False

Question 16

While classic venture capitalists finance very few companies, some of the ones that they do finance play a crucial role in the development of ______industries.

Accepted Answer

A)   knowledge-based
B)   return-based
C)   risk-based
D)   core economy-based
E)   none of the above

Question 17

The businesses that need the most startup capital are those created with the intent to grow and hire employees.

Accepted Answer

A) True 
 B)False

Question 18

Angel investment frequently precedes formal venture capital.

Accepted Answer

A) True 
 B)False

Question 19

Entrepreneurs in search of startup funding should target self-made entrepreneurs with high incomes. More specifically, they should first talk with entrepreneurs among their relatives, friends, and neighbors.

Accepted Answer

A) True 
 B)False

Question 20

The general partners' share of investment returns is called carried interest.

Accepted Answer

A) True 
 B)False

Exam 10: Financing Entrepreneurial Ventures Worldwide

What is the average amount of a microenterprise loan through the Grameen Bank?

The expected internal rate of return or IRR (compound annual return on investment) is calculated from the expected payback time and the times return for formal investors and entrepreneurs who reported both.

What category of venture capital participant employs gatekeepers to advise it on what projects to invest in and to monitor the investment afterwards?

The limited partners of venture capital funds raise money from the general partners.

In general, venture capital is invested in companies that are already in business.

For informal investment, the amount invested by ___ is the highest, and the median return expected is times the original investment.

Since the mid-1990s, venture capital grew rapidly, and most nations were striving to emulate the classic venture capital model of which country?

What subset of informal investor is relatively sophisticated and invests primarily in glamorous companies?

Which of the following categories of informal investors expects the highest return on his or her investment, since it is made in a more detached manner?

According to Figure 9.5, an R² of 0.86 indicates that 86% of the variation in annual amount per informal investor is explained by:

Most business angel networks in developed nations look for high-potential startups that have prospects of growing into substantial enterprises.

The median expected payback time of an investment is one year, and the median amount returned is two times the original investment.

If a venture capital fund is successful, as measured by the financial return to the limited partners, the general partners usually raise another fund ______ years later.

The rarest source of capital for nascent entrepreneurs is______.

Using GEM data for the United States, we can point out that the informal investor prevalence rate among entrepreneurs is much higher than the rate among non-entrepreneurs.

While classic venture capitalists finance very few companies, some of the ones that they do finance play a crucial role in the development of ______industries.

The businesses that need the most startup capital are those created with the intent to grow and hire employees.

Angel investment frequently precedes formal venture capital.

Entrepreneurs in search of startup funding should target self-made entrepreneurs with high incomes. More specifically, they should first talk with entrepreneurs among their relatives, friends, and neighbors.

The general partners' share of investment returns is called carried interest.