ENT 396 CH.8
Because the advantages of going public outweigh the disadvantages, it is in a corporation's best interest to go public.
False
Equity financing is money invested in the venture with legal obligations to repay the principal amount of interest or interest rate on it.
False
Venture capitalists, surprisingly, require little information before they make an investment.
False
Which is an important question for the entrepreneur to ask when evaluating the venture capitalist?
Is the person someone with whom the entrepreneur can work?
Which of the following statements is not true of venture capitalists?
They are interested in trying to manage firms themselves.
Informal risk capitalists are often referred to as "business angels."
True
Informal risk capitalists are those who have already made their money and now seek to help new ventures.
True
Private placement is a method of raising capital through the private placement of securities.
True
Sophisticated investors are wealthy individuals who invest more or less regularly in new and/or early- and late-stage ventures.
True
Sources of debt financing include trade credit, accounts receivables, factoring, and finance companies.
True
Which is one of the most important questions for entrepreneurs to ask regarding venture capitalists?
What is it like to work with their firm?
An informal risk capitalist is referred to as:
a business angel
Which of the following does not represent a category of angel investors?
amateur angels
The entrepreneur should ask the venture capitalist _____ questions.
an unlimited number of
The most common source of debt financing is
commercial banks
Which of the following terms is not synonymous with social lending?
commercially viable lending
Major trends in the venture capital field today include all of the following except
less specialized and more homogenous funds
One of the advantages of public offerings is
liquidity
The main objective of Regulation D is to
make it easier and less expensive for small ventures to sell stock
Which of the following is not a type of debt financing?
private placement
A disadvantage of debt financing is
regular interest payments
Advantages of debt financing include all of the following except:
regular interest payments
Regulation D augments the regulations for reports and statements required for selling stock to private parties, friends, employees, customers, relatives, local professionals.
False
Use of debt to finance a new venture involves a payback of funds plus an interest fee for the use of the money.
True
Which of the following is a type of equity financing?
common stock