ENTR 200 Week 7 (Chpt. 8)

Every founder needs to be able to tap people he or she respects and trusts on a personal level who can guide the founder's growth as a leader. According to the chapter, this is accomplished through what vehicle?

A Mentor board

Which of the following is a founding team problem that can lead to business failure? (Select all that apply.)

- A formal hierarchy - A lot of opportunities - A lack of technical talent

Which of the following satisfy the 20-point IRS test for classifying workers as independent contractors? (Select all that apply.)

- Does not receive training from the entrepreneur. - Is responsible only for the results - Hires, supervises, and pays her own employees.

Which of the following are considered professional advisors to your business? (Select all that apply.)

- Insurance Agents - Bankers - Attorneys - Accountants

While diversity is important, which of the following is something that teams need to be in synch on? (Select all that apply.)

- Risk Preference - Values - Work Ethic

Research has found that the most important predictor of a founding team's success is:

Communication

About 35 percent of a team's performance is accounted for by which of the following?

Face-to-Face Conversations

True or False? According to research, the most successful teams use texting, Skype, and other social media devices to communicate.

False

True or False? Homogeneous teams are more successful than heterogeneous teams.

False

True or False? In a two-person company, it's not as important to designate areas of responsibility.

False

Which of the following is correct regarding an advisory board?

It is a less costly alternative to a board of directors

True or False? A team is less likely to abandon an effort to start a business.

True

True or False? It's a good idea to hold off decisions on equity splits in the first few months.

True

True or False? It's important that every team have a lead entrepreneur.

True

True or False? The most important predictor of a team's success is communication.

True

Suppose you've determined that your startup's pre-money valuation (before investment) is $1,000,000 based on one of the generally accepted methods of calculation (discussed in Chapter 16). Assume the co-founders collectively hold 100 percent of the equity. You raise $200,000 in seed capital from an investor. What is the dilution rate? a. 17% b. 20% c. 15%

a. 17%

Suppose you've determined that your startup's pre-money valuation (before investment) is $1,000,000 based on one of the generally accepted methods of calculation (discussed in Chapter 16). Assume the co-founders collectively hold 100 percent of the equity. You raise $200,000 in seed capital from an investor. What percentage of stock in the company does the new investor hold? a. 17% b. 20% c. 25%

a. 17%

Suppose you've determined that your startup's pre-money valuation (before investment) is $1,000,000 based on one of the generally accepted methods of calculation (discussed in Chapter 16). Assume the co-founders collectively hold 100 percent of the equity. You raise $200,000 in seed capital from an investor. What is your post-money valuation? a. $1,000,000 b. $1,200,000 c. $800,000

b. $1,200,00

Suppose you've determined that your startup's pre-money valuation (before investment) is $1,000,000 based on one of the generally accepted methods of calculation (discussed in Chapter 16). Assume the co-founders collectively hold 100 percent of the equity. You raise $200,000 in seed capital from an investor. How much of the company do the founders now own? a. 80% b. 75% c. 83%

c. 83%

limited liability companies

A hybrid form of organization that combines the characteristics of a corporation and a partnership.