ENT 396 CH.6

Name the pitfall described by the statement, "Engineers and technically trained people are particularly prone to falling in love with an idea for a product or service."

lack of objective evaluation

Which of the following as a factor contributing to new-venture failure?

product/market problems

Market feasibility analysis relies on

general economic trends and competitor data

The entrepreneurial motivations of individuals relate to the entrepreneur, the environment, and the venture.

True

The type of venture that is expected to attract venture capital would most likely be a

high-growth venture

Most entrepreneurs are objective when they evaluate their new idea

False

Feasibility analyses include technical, market, financial, organizational, and competitive analyses

True

Obtaining external financing is considered one of the major types of problems for a new venture during its first year

True

Solid analysis and evaluation of the feasibility of the product/service idea are critical tasks in starting a new business

True

Poor financial understanding is characterized by which of the following?

inadequate understanding of costs and funding requirements

Rapid technological advances in many industries cause a concern for __________ in new venture development.

rapid product obsolescence

Which of the following is critical to a product's success?

timing marketing approach objectivity

Most entrepreneurs are well schooled in the technology associated with their ventures

False

Overall market understanding rather than a time-consuming focus on market niches is sufficient for an evaluation

False

There is a great abundance of reliable data concerning the start-up, performance, and failure of new ventures

False

Which of the following is a major reason for the failure of a new venture?

inadequate market knowledge

A common pitfall in selecting a new venture is

poor financial understanding

Surprisingly, growth of sales is generally not considered a critical factor in assessing new ventures

False

The decision of an entrepreneur to ignore the market is a safe one if he or she is sure that the idea will be a success

False

An approach developed as a criteria selection list from which entrepreneurs can gain insights into the viability of their venture is the

feasibility criteria approach

Venture classifications include which of the following types of venture?

high-growth ventures

Many entrepreneurs lack _____ for their new venture.

objectivity

Three specific phases that a new venture goes through are

prestart-up, start-up, poststart-up

The entrepreneurial motivations of individuals usually relate to which of the following factors?

the environment the entrepreneur the venture

Using the failure prediction model discussed in the chapter, the risk of failure can be reduced by:

using less debt as initial financing and generating revenue in the initial stages