CH 8 HW entrep
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.
Sophisticated investors are wealthy individuals who invest more or less regularly in new and/or early- and late-stage ventures.
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.
The entrepreneur should ask the venture capitalist _____ questions.
an unlimited number of
Which of the following terms is not synonymous with social lending?
commercially viable lending
Which of the following is a type of equity financing?
common stock
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.
Informal risk capitalists are those who have already made their money and now seek to help new ventures.
True
Sources of debt financing include trade credit, accounts receivables, factoring, and finance companies.
True
Use of debt to finance a new venture involves a payback of funds plus an interest fee for the use of the money.
True
Major trends in the venture capital field today include all of the following except
less specialized and more homogenous funds
Because the advantages of going public outweigh the disadvantages, it is in a corporation's best interest to go public.
False
Venture capitalists, surprisingly, require little information before they make an investment.
False
Which of the following does not represent a category of angel investors?
amateur angels
The most common source of debt financing is
commercial banks.
Equity financing is money invested in the venture with legal obligations to repay the principal amount of interest or interest rate on it.
False
Regulation D augments the regulations for reports and statements required for selling stock to private parties, friends, employees, customers, relatives, local professionals.
False
Informal risk capitalists are often referred to as "business angels."
True
Private placement is a method of raising capital through the private placement of securities.
True