EEE 2023 - Final Exam
A company's ________ is the rate at which it is spending its capital until it reaches profitability.
burn rate
A firm's negative real-time cash flow is its ________.
burn rate
Which of the following is NOT an external growth strategy? a. Strategic alliances b. Franchising c. International expansion d. Mergers and acquisitions e. Licensing
c. International expansion
Which of the following is NOT a top reason why new products fall? a. Customers saw the product was too expensive b. The product was no different than the competition's c. The potential market was underestimated d. The product was poorly designed e. The costs of developing the product line were too high
c. The potential market was underestimated
Which of the following is NOT a topic you should speak about in a 60-sec elevator pitch? a. qualifications of the founders b. opportunity or problem being solved c. description of products or services d. the market e. how quickly you will be profitable
e. how quickly you will be profitable
A(n) _______ is a brief, carefully constructed statement that outlines the merits of a business opportunity.
elevator speech (or pitch)
In June 2017, Blue Apron made a first sale of its stock to the public. This was Blue Apron's ______.
initial public offering
Many entrepreneurs launch their firms with the intention of funding all of their needs ______.
internally
Organic growth is ________.
internally generated.
A(n) ________ bank is an institution that acts as an underwriter or agent for a firm issuing securities.
investment
There are three reasons that most entrepreneurial ventures need to raise money during their early life: cash flow challenges, capital investments, and ________.
lengthy product development
In some industries, firms need to raise money to pay the up-front costs of _________.
lengthy product development cycles
The Art Shoppe grew over the years by developing new products and attracting new customers. The Art Shoppe's growth is called ______.
organic
Which of the following is a key to successful geographic expansion?
perform successfully in the initial location
Manzana foods raised capital through a direct sale of $5 million worth of securities to Brookheimer Partners, an institutional investor. This is an example of _______.
private placement
Equity financing means exchanging partial ownership of a firm, usually in the form of ______, in return for funding.
stock
John invested $25,000 in Marlo Ventures, a home flipping business. While Sammy invested $20,000 in the venture, Daniel did not put in any money in the venture, but became a 50 percent equity owner because he had contributed enormous time and expertise into the venture. The 50 percent is ________ equity that represents the value of time and effort that Daniel put into Marlo Ventures.
sweat
The vast majority of founders contribute personal funds along with ________ to their ventures.
sweat equity
Gina's catering expects to spend $30,000 of its $50,000 capital until it reaches profitability. This is Gina Catering's _______.
Burn rate
________ are individuals who invest their personal capital directly in start-ups.
Business angels
________ expansion is most common type of expansion in retail settings.
Geographic
Geographic expansion is a(n) _____ strategy.
Internal growth
Angie's Pretzels, an extremely successful chain of 77 stores in the U.S., grew internationally by granting permission to companies in various European countries to use its intellectual property and trade name to do business. Angie's Pretzels growth strategy is called _______.
Licensing
The investors who invest in their personal capital funds are called _____.
Limited partners
The Amazon Rewards Card makes it more convenient for customers to purchase the company's products. Amazon is using a(n) _______ strategy.
Market penetration
Internally generated growth is often called _______ growth because it does not rely on outside intervention.
Organic
All of Orlando, Florida-based The Trinity's Hospitals medical transcription work is down by an independent company in India. This is an example of _____.
Outsourcing
To free up factory space to increase production of its basic product, Parris Metals that used to package its products internally decides to use the services of an outside packer. Parris Metals has __________ packaging.
Outsourcing
When a venture has high risk with an uncertain return (characterized by weak cash flow, high leverage), its most appropriate source of funding is ______.
Personal funds, friends and family, and/or bootstrapping
A _______ strategy involves making additional versions of a product so that it will appeal to different clientele or making related products to the same clientele.
Product line extension
A(n) _______ strategy involves making additional versions of a product so that it will appeal to different clientele or making related products to sell to the same clientele.
Product line extension
Zipcar, the popular car-sharing service, recently launched FastFleet, a service to help cities more efficiently use cars in their fleet. This is an example of a(n) _______ strategy.
Product line extension
_________ is a balancing act.
Raising money
Wanderberg Machines went on a whirlwind tour that consisted of meetings in 12 key cities where the firm presented its business plan to investors. This tour was a ______.
Road show
The most common sources of debt financing are commercial banks and _________.
Small Business Administration - guaranteed loans
Which of the following is NOT a reason why new products fail? a. Customers saw the product as too expensive b. The product was poorly designed c. The potential market was overestimated d. The company has a poor business model e. The costs of developing the product line were too high
The company has a poor business model
Raising money for a start-up is _________.
a balancing act
Which of the following is NOT an advantage of internal growth strategies? a. Adds to industry capital b. Provides maximum control c. Preserves organizational culture d. Incremental, even-paced growth e. Encourages internal entrepreneurship
a. Adds to industry capital
Which of the following is NOT a key to effective new product and service development? a. Focus on a broad target market b. Find a need and fill it c. Develop products that add value d. Get quality and pricing right e. Conduct ongoing feasibility analysis
a. Focus on a broad target market
Which of the following is NOT a disadvantage of Internal growth strategies? a. Investment in a failed internal effort can be difficult to recoup b. Incremental, even-paced growth c. Need to develop new resources d. Adds to industry capital e. Slow form of growth
b. Incremental, even-paced growth
According to Fundable, on average, ______ percent of start-ups are funded by friends and family.
38
The prototypical business angel is typically _____ years old.
50
Typically, the seed money that gets a company off the ground comes from the founders' own pockets. There are three sources of money in this area: personal funds, friends and family, and ________.
Bootstrapping
___________ is the term attached to the general philosophy of minimizing start-up expenses by aggressively pursuing cost-cutting techniques and money-saving tactics.
Bootstrapping
Many entrepreneurs go about the task of raising capital haphazardly because they lack experience in this area because they _________.
don't know much about their choices
In the prescription drug industry, the path from the research lab to the patient takes an average of ________ years.
10
The average product life cycle in the computer software industry is ______.
14-16 months
What is the typical time horizon for equity investors to get their money back?
3 - 5 years
Which of the following is NOT a top reason why new products fail? a. Customers saw the product as too expensive. b. The product was poorly designed. c. The product was no different than the competitions. d. The potential market was underestimated. e. Cost of developing the product line were too high.
d. The potential market was UNDERestimated
