Entrepreneurship 2
How does Google make most of its money?
Text based ads on search results
What rule did Instagram implement before retracting after substantial backlash?
The company had the right to sell user's photos
When are stock options negative for the employee?
The market price is below the strike price
Why would investors want to negotiate a lower valuation with the entrepreneur?
To get more equity
What is the book value valuation of the firm?
Total assets minus intangible assets
Why is it easier for serial entrepreneurs to raise money?
Track record makes investors more willing to take risk
________ is the basis of nearly every enduring relationship in business.
Trust
Why is it difficult to value an early stage company?
Uncertain cash flow
What is intellectual property?
Valuable intangible property owned by person's or companies
Why is it most beneficial for a company to license out its product?
Valuable market penetration
In the formula for throughput efficiency, VA stands for:
Value-adding time
Total cost is given by the formula: TC = FC + VC. What does VC stand for?
Variable cost
What is one difference between angels and venture capitalists?
Venture capitalists cause more dilution
When does execution most falter?
When the company is not synchronized
SoundCloud is valued at $200 million, but is having trouble generating revenue and paying its employees. SoundCloud is in a shortage of:
Working capital
Sheryl Sandberg is the COO of Facebook and during an all hands meeting emphasizes the amount of revenue that needs to be reached for the company to become profitable. Sheryl embodies a ________ leader.
coaching
Clusters promote both ________ and ________.
competition, cooperation
The difference between a merger and acquisition is the degree of ________.
control
The formula for Coke is considered a ________.
trade secret
Which of the following is typically not a category of an operating expense?
Appreciation
Of the following, what has lost its trademark because it has become a common name?
Aspirin
Which of the following is a high margin, low volume company?
BMW
Which of the following is the biggest center of entrepreneurial activity in India?
Bangalore
An entrepreneur gives his pitch and makes an assumption that his revenue growth will continue at the same rate. This is an example of a(n):
Base case
Circle is underpinned by this kind of technology, which signifies a decentralized public ledger.
Blockchain
What is not something entrepreneurs should consider when filing a patent?
Building out a legal division for the startup
In an effort to expand quickly, Uber spends a large amount of revenue on opening in international markets. Uber would have a high ________ rate.
Burn
________ is the process of legally gathering data about competitors.
Competitive intelligence
What was the topic of the historic lawsuit Apple won in 1982?
Copyright related to software embedded in chips
Which of the following is not a key characteristic of a new basic technology?
Corporate governance
What is the first part of a pitch?
Customer need
Greg is a founder who needs more money to continue operating his company. The company has a path to profitability and Greg does not want to dilute his equity. He borrows $100 million from the Silicon Valley Bank. What is this an example of?
Debt capital
What important innovation did Gary Rodgers contribute to General Electric?
Digital dashboard
Which is not one of the seven traits of a leader?
Disruptive
What is a trademark?
Distinctive word, name, or shape that identifies a company
Which of the following is not a way for a startup to exit?
Down round
Which of the following is not necessary to understand the customer?
EBITDA
Which two current tech moguls fused their companies into PayPal?
Elon Musk, Peter Thiel
What is the discipline for meshing strategy and reality?
Execution
What is a cost driver?
Factor that affects total firm costs
Management salaries are an example of:
Fixed costs
Why did Webvan fail?
Flawed business model
What is a blockbuster profit model?
Focus on creating a series of big winners
Which of the following is not a principle of negotiation?
Focus on the positions of the party, not the interests
What is the goal of the learning process?
Generate new strategies
What is a cluster?
Geographic concentration of interconnected companies
Which company has an established corporate venture capital arm?
Helen has a meeting with a venture capitalist for a Series A round at a $10 million valuation. She has proprietary patents for the latest advancements in facial recognition, a team of five Stanford grads, and seed money from Andreessen Horowitz and Union Square Ventures. She has two enterprise customers. The VC has her interest piqued but declines to invest at this stage. Why?
Helen needs more customers
The merger between Bank of America and Merrill Lynch would be an example of a(n):
Horizontal merger
Which of the following is not an important function of online technologies?
Hybridization
How did Google use DeepMind after the acquisition?
Improve efficiency of data centers
What strategy does Tencent employ that is not as common among major western tech companies?
In-app purchases
Of the five types of mergers and acquisitions, Sirius and XM Radio would be an example of:
Industry convergence
Dropbox is this type of profit model:
Installed base
Which is the sum of all types of capital within a company?
Intellectual capital
The ROI is the net income divided by:
Investment
Of the following, which is not a way venture capitalists get the money they deploy?
Investment bankers
Why did Jeff Bezos choose to name his company Amazon?
It conveyed the idea of a huge entity that was not limited to one product
Medtronic purchased the cardiovascular division of this major company it now competes with:
Johnson & Johnson
In ________ stage deals, it is more common to see warrants offered to tie ownership to performance.
Late
What changed the company arc of Shazam?
Launch of Apple App Store
Because of the rise of Foursquare, Instagram pivoted to photo sharing. This is an example of:
Learning organization
What is a disadvantage of an international strategy?
Low-local responsiveness
Why are economies of scale most important for companies?
Lower unit cost, thereby lowering price
Why did the VR startup Vrideo fail?
Major corporations entered the VR scene soon after their founding
Book value is different than market value because:
Market value factors in the company's growth prospects
Steve Jobs often focused on competitors to bring the company together. What was Apple's competitor to beat for the longest time?
Microsoft
What does not occur in the maturity stage of a business?
Move to decentralized structure
If an engineer leaves Lyft to work at Uber, she could be in violation of what contract?
NCC
What is the primary value provided by a virtual organization?
Networking partners and agents
Why is it important that employees have stretch work capabilities?
New ventures have constantly changing demands
Total sales is given by the formula: R = Q x P. What does Q represent?
Number of units sold
This type of business generally has little to no cost of goods sold.
Online
What is defined as the right but not obligation to take some action in the future?
Option
Flexible organizations that effectively adapt to change are called ________.
Organic
The best conditions for profit occur when product cost is low, and ________ is high.
Perceived value
Which of the following is a measure of operational success?
Performance
Which type of stock has claims on dividends before common stock?
Preferred
What is ergonomics?
Process of making physical tasks easier
In a typical value chain, what comes before logistics and manufacturing?
Product design
Which of the following is not a risk assessed by the investor?
Psychological
Return on invested capital (ROIC) is the same as:
ROI
Which of the following is not a source of legitimacy?
Raising a down round
Why do lean systems use a just-in-time approach?
Reduce unnecessary inventory
Why has Zara retained its manufacturing capability?
Respond quickly to new fashion demands
What occurs in the takeoff stage of a business?
Revenues start to grow
As a new business grows, it tends to follow a ________ curve.
S
What was the most important advantage Amazon had over brick and mortar retail stores?
Significant expertise with direct-to-customer shipping
Why should new ventures be careful to not globalize too quickly?
So they can better understand their customers and product
People tend to respond to endorsements they trust. This is an example of the principle of:
Social proof
The business plan and ________ make up the core of a company "arch."
Story
Which of the following does the balance sheet not have?
Taxes
According to John Doerr, what is the most important part of a business plan?
Team
In general, how long does a patent last from the date of filing?
20 years
What is an advantage of a multi-domestic strategy?
Ability to customize products for local markets
Why did Netflix outlast Blockbuster?
Adapted to larger trends
Which of the following is not a main step for acquiring a company?
Address potential synergies
Etsy and many other ecommerce sites take advantage of this revenue model:
Affiliate revenue model
Which of the following is not a condition that increases the need for relational coordination?
Agile development
Most of Cisco's acquisitions were made between ________ and ________.
1999, 2000