Entrepreneurial Problem Solving Mid-Term

Venture capitalists are experienced professionals who provide a full range of service for new ventures including supplying labor for start-up. market research and strategy for pricing. management consulting. R & D knowledge.

management consulting.

The four phases of the creative process are knowledge accumulation, incubation, ideas, and evaluation and implementation. True or False?

True

The maverick entrepreneur who avoids reaching out and finding help is a myth of the past. True or False?

True

Appositional relationships often lead to visions that result in which of the following? new ideas, products, and services poor image of themselves rigid and dogmatic relationships unmotivated by unclear focus

new ideas, products, and services

Security hunting means using probability and stereotypes to minimize risk. finding a permanent source of venture capital. sticking firmly to decisions. installing a security system.

using probability and stereotypes to minimize risk.

An analysis of the competition should look for ______. opportunities weaknesses unscrupulous practices legal action suits

unscrupulous practices

Many entrepreneurs of new ventures lack knowledge of their product. a unique angle for the venture. drive. the willingness to put in long hours.

a unique angle for the venture.

Which of the following is not currently cited as a trend creating business opportunities? green products breakfast cereals health care concierge services

breakfast cereals

The FDD contains how many categories? 41 23 9 100

23

_______ bank loans are made on a discounted value of the receivables pledged. Accounts receivable financing Peer-to-peer​ Trade lending Convertible stock

Accounts receivable financing

Background or knowledge accumulation is the second phase of the creative process. True or False?

False

Entrepreneurs are rarely able to set up a business without investment funds or bank loans. True or False?

False

Extension is the combination of existing concepts and factors into a new formulation. True or False?

False

Large ventures often use private placements as a method of raising capital. True or False?

False

Most entrepreneurs hire lawyers to brief them on the legal issues surrounding a new venture. True or False?

False

Sales records are of very little value to a buyer in evaluating a company's worth. True or False?

False

The Federal Trade Commission does not provide information on franchise success. True or False?

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. True or False?

False

The principles of innovation are largely focused on profit maximization. True or False?

False

The sources of new business ideas among men and women are identical in type and proportion. True or False?

False

​Peer-to-peer lenders are friends of the entrepreneur who want to invest in the new venture. True or False?

False

The Regulation D exemptions include all of the following except Rule 504—placements of up to $1 million. Rule 503—placements of less than $500,000. Rule 505—placements of up to $5 million. Rule 506—placements in excess of $5 million.

Rule 503—placements of less than $500,000.

"Intensity of competition" changes the dominance of problem areas. True or False?

True

Entrepreneurs are always looking for unique opportunities to fill needs or wants. True or False?

True

Informal risk capitalists are those who have already made their money and now seek to help new ventures. True or False?

True

Many entrepreneurs do not understand the marketing life cycle of a new product. True or False?

True

One of the most helpful avenues for developing one's own creative talents is to be aware of the habits and mental blocks that stifle creativity. True or False?

True

The cognitive ability of entrepreneurs to acquire and transform information has yet to be studied. True or False?

True

The comprehensive feasibility analysis approach is closely related to the preparation of a thorough business plan. True or False?

True

The entrepreneurial motivations of individuals relate to the entrepreneur, the environment, and the venture. True or False?

True

Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach. True or False?

True

When purchasing an existing business, the prospective owner should conduct an assessment of the business's current group of employees. True or False?

True

When using P2P lending, one potential danger may be an uncertain regulatory environment. True or False?

True

​Business brokers specialize in business opportunities and can provide leads and assistance in finding a venture for sale. True or False?

True

Which of the following is not one of the most common questions typically required to be answered by entrepreneurs seeking funding? What do you plan to do with the money? How much money do you need? When do you need the money? What exact date will you repay the money?

What exact date will you repay the money?

What criteria must be met in the design methodology approach? concept feasibility financial feasibility market viability design feasibility

concept feasibility

Independence, autonomy, and ______ are the major driving forces behind lifestyle ventures. marketing capitalists control people

control

The person who gets the franchise is usually required to do all of the following except: invest money in the operation. maintain a specified quality of performance. pay a fee. design a logo for the unit.

design a logo for the unit.

Which of the following mental habits inhibit creativity and innovation? either/or thinking, stereotyping. functional perspective, mind-sets. security hunting, risks. stereotyping, incubation.

either/or thinking, stereotyping.

All of the following should be examined when evaluating the selection of venture except employees. trademark. ​furniture. accounts receivable.

employees.

During the prestart-up and start-up phases, ____ factors are critical. five two three seven

five

Of the following, which is not typically identified as a bootstrapping technique? sharing office space hiring seasoned veterans encouraging customers to pay early trading equity for services

hiring seasoned veterans

The phase of the creative process when the idea or solution the individual is seeking is discovered is the background or knowledge accumulation. incubation process. idea experience. evaluation and implementation.

idea experience.

A(n) ____ approach indicates the importance of people's awareness of their daily lives for developing new business ideas. new-new old-old old-new new-old

new-new

Problems associated with the managerial team include being high-risk takers. poor relationships with parent companies. verbal agreements made to venture capitalists. filing lawsuits.

poor relationships with parent companies.

Which of the following is not one of the phases in the creative process? background or knowledge accumulation evaluation and implementation the incubation process preliminary investigation

preliminary investigation

Which of the following costs do not add to the cost of franchising? insurance prepaid utility bills legal and professional fees opening product inventory

prepaid utility bills

In the struggle to achieve security, many people also tend to rely on the theory of _________ thinking to make decisions. either/or lucky innovative probability

probability

Which of the following costs add to the cost of franchising pertaining to principal and interest payments? insurance payroll legal and professional fees debt services

debt services

The franchisee's responsibilities does not include a financial investment. payment of a fee. engaging in a continuous business relationship. designing the product specifics.

designing the product specifics.

​Which of the following is not considered by entrepreneurs when examining opportunities for possible ventures? business brokers newspaper ads the cost of replacing an employee professional sources

the cost of replacing an employee

Informal investors find projects through newspapers. a network of friends. commercials. banks.

a network of friends.

Long-term debt is used for recurring purchases. purchase of property or equipment. payment of payroll. a rainy day fund.

a rainy day fund.

P2P lenders charge fees for brokering and servicing loans and collect penalties for late payments. True or False?

True

A new venture should be cheap. unique. easy to copy. inferior to its competitors.

unique.

The advantages of franchising does not include training and guidance. brand-name appeal. proven track record. franchise fees.

franchise fees.

The individual who arranges for a dealer to handle a specific product or service under certain mutually agreed upon conditions is known as the _____. franchisee franchisor franchiser franchisette

franchisor

The extra value a business can command in a sale is known as goodwill. saleable value. market value. asset value.

goodwill.

Which is not a stage of the evaluation process? initial screening evaluation of the business plan group discussion final evaluation

group discussion

What is a critical consideration when assessing customer availability? amount of products sold. length of time needed to determine who the customers are, as well as their buying habits. the exact profitability of the venture. how they will obtain the product.

length of time needed to determine who the customers are, as well as their buying habits.

Regulation D defines separate exemptions that are based on the amount of money being raised. Which is not a rule that accompanies these exemptions? rule 503 rule 504 rule 505 rule 506

rule 503

When going public with public offerings an advantage might be size of the company's capital amount. the company's size. the company's market share. the product price.

size of the company's capital amount.

SBIC stands for the small business in capital. securities, bonds, investment, capital. small-business investment companies sources of business investment companies

small-business investment companies

What is not a factor when looking at the condition of the inventory? salability recorded and physical check of the inventory to verify the existence of the inventory whether it is out of date suppliers

suppliers

Which evaluation method enables an entrepreneur to judge the potential of the business? the entrepreneurial analysis method the venture analysis method the profile analysis the net out-of-pocket cost method

the profile analysis

Sources of debt financing include trade credit, accounts receivables, factoring, and finance companies. True or False?

True

The actual cost of "opening the doors" of a franchise establishment can be more than $200,000. True or False?

True

The type of venture that is expected to attract venture capital would most likely be a corporate venture. high-growth venture. lifestyle venture. smaller venture.

high-growth venture.

Which of the following are sources of innovation? unexpected occurrences and incongruities duplication and processes synthesis and technology industry changes and extension

unexpected occurrences and incongruities

Solid analysis and evaluation of the feasibility of the product/service idea are critical tasks in starting a new business. True or False?

True

Sophisticated investors are wealthy individuals who invest more or less regularly in new and/or early- and late-stage ventures. True or False?

True

Structured and focused chaos is necessary for creativity to occur. True or False?

True

The Lean Start-Up methodology is hypothesis-driven. True or False?

True

The final decision to purchase a franchise should be up to your lawyer. your financial backer. you. your accountant.

you.

Major trends in the venture capital field today include all of the following except less specialized and more homogenous funds. emerging feeder funds. decrease in start-up investment amounts. global reach.

less specialized and more homogenous funds.

Which of the following could be considered a trend that signals a shift in the current paradigm of the population? societal technology market economic

market

The Build-Measure-Learn feedback loop begins with identifying which hypotheses to test and ends with requiring the entrepreneur to take a look at the results and determine whether a pivot is required. True or False?

True

The Franchise Disclosure Document (FDD) is a legally required disclosure document that must be presented to potential franchisees during presale discussions. True or False?

True

The growth pattern of sales is critical for an entrepreneur to make correct forecasts. True or False?

True

A solid analysis is a critical task in starting a new business. of no importance. no way to discover flaws in a new-venture idea. not a critical task in starting a new business.

a critical task in starting a new business.

Which of the following is not an example of recognizing relationships in creativity? adding fruit juice to soft drinks to make Slice introducing Sierra Mist to the market to compete with Sprite combining combustion engine technology with the wheel to create the automobile using a 330-pound defensive football player as a running back and wide receiver

introducing Sierra Mist to the market to compete with Sprite

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." inadequate understanding of technical requirements lack of venture uniqueness no real insight into the market lack of objective evaluation

lack of objective evaluation

Relying on abstractions can limit one's perception of reality. do nothing detrimental. help in making correct choices. add a mathematical element to an idea.

limit one's perception of reality.

Approximately how many commercial banks are there in this country? about 40,000 about 5,600 about l7,000 about 20,000

about 5,600

​The Three A's of Metrics are actionable, accessible, auditable. accessible, abundance, audience. accuracy, accountability, auditable. activity, actionable, accessible.

actionable, accessible, auditable.

When should a potential franchisee receive the FDD (Franchise Disclosure Document)? two days before signing a contract or paying any money at least ten days before signing a contract or paying any money two days before signing a contract at least ten days before paying any money

at least ten days before signing a contract or paying any money

Creativity cannot be developed or improved. True or False?

False

Which of the following statements is true? A good innovator should be a genius. Innovators rarely work in more than one area. Innovators are poor workers. A good innovator uses only the left side of the brain.

Innovators rarely work in more than one area.

Which of the following statements is true? The right brain helps people analyze and verbalize. The right brain helps people understand analogies and imagine things. The left brain helps people understand analogies and imagine things. Right and left brain concepts are meaningless.

The right brain helps people understand analogies and imagine things.

In a lifestyle venture, independence, autonomy, and control are the primary driving forces. True or False?

True

Which of the following can help entrepreneurs carry out the evaluation and implementation stage? increasing energy level hiding ideas from knowledgeable people avoiding advice from others ignoring hunches and feelings

increasing energy level

When starting a business, which of the following sources of financing are least likely to be used? trade credit factors leasing companies insurance companies

insurance companies

Which of the following is not considered a principle of innovation? being action oriented starting big investing in securities aiming low

investing in securities

Incongruities are gaps or differences between expectations and reality. True or False?

True

Only a small percentage of new ventures succeed. True or False?

True

Two important components of creative problem solving are design and solution. intelligence and technical competence. capital and opportunity. process and people.

process and people.

Rapid technological advances in many industries cause a concern for in new venture development. faulty product performance rapid product obsolescence inadequate awareness of competitive pressures undercapitalization

rapid product obsolescence

Process needs exist when and entrepreneur can meet a new source of demand. exist to satisfy government regulations. exist when a venture capitalist provides money only for a project filling its needs. exist when the economy suffers a downturn.

exist when and entrepreneur can meet a new source of demand.

All of the following are characteristics of a creative climate except a large variety of personality types. an enjoyment in experimenting with new ideas. restricted communication with outsiders. a willingness to accept change.

restricted communication with outsiders.

In the incubation process, ways of getting away from a problem include working harder working on something else. going to parties. visiting the library.

working on something else.