Ch. 8 kuratko quiz

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T/F: Crowdfunding provides entrepreneurs with access to beta-testing and market feedback.

True

T/F: Frugality is deemed a bootstrapping technique.

True

T/F: Informal risk capitalists are often referred to as business angels.

True

T/F: P2P lenders charge fees for brokering and servicing loans and collect penalties for late payments.

True

T/F: Sources of debt financing include trade credit, accounts receivable financing, factoring, and finance companies.

True

Which of the following is not one of the most common questions typically required to be answered by entrepreneurs seeking funding?

What exact date will you repay the money?

Which of the following is not a question commonly asked by banks of entrepreneurs?

What interest rate did you have in mind

Which of the following is not a stage of the evaluation process?

Beta-testing

Approximately how many commercial banks are there in this country?

about 5,500

Which of the following is a type of equity financing?

common stock

One of the advantages of public offerings is

image.

Short-term debt is paid back

in one year

Which of the following would be most commonly used for intermediate-term financing?

leasing companies

When going public with public offerings an advantage might be the

size of the company's capital amount.

According to the text, which of the following could be considered a "deal killer" by a venture capitalist?

the excessive founder salaries

Which of the following would be most commonly used for short-term financing?

trade credit

T/F: A good idea is important, but a good management team is even more important.

true

When securing a bank loan, which of the following is not a question an entrepreneur should be prepared to answer?

What is the price of your product?

Which of the following was a significant contributor to job growth, with the creation of 263,950 new jobs in the United States in 2016?

angel investment

The most common source of debt financing is

commercial breaks

Financing includes all of the following except

equitable payback

Which of the following is a source of capital for entrepreneurs?

equity

Because of how they are structured, traditional industries such as textiles, furniture manufacturing, and clothing manufacturing commonly use which of the following debt financing sources?

factoring

T/F: Peer-to-peer lenders are friends of the entrepreneur who want to invest in the new venture.

false

Which of the following is an important question for the entrepreneur to ask when evaluating the venture capitalist?

how many deals has the firm actually made in this field?

When starting a business, which of the following sources of financing is least likely to be used?

insurance companies

Major trends in the venture capital field today include all of the following except

less specialized and more homogenous funds

Venture capitalists are experienced professionals who provide a full range of services for new ventures including

management consulting.

Which of the following is not one of the eight critical factors that venture capitalists use in the evaluation of new ventures?

managerial structure

Informal investors find projects to invest in through

network of friends

Equity capital is

not a loan but a form of stock

Which of the following terms is synonymous with social lending?

peer to peer (P2P) lending

Financial equity instruments, which give investors a share of the ownership, may include

preferred stock.

A disadvantage of debt financing is

regular interest payments

_____ is one of the disadvantages of going public.

shareholder pressure

Which of the following is not a major trend that has occurred in venture capital over the last few years?

stronger small start-up investments

Which of the following does not represent a category of angel investors?

technology angels

Long-term debt is used for

the purchase of property or equipment.

Frugality is deemed a bootstrapping technique.

true

T/F: Common stock is the least basic form of ownership.

False

T/F: Only a small number of informal risk capitalists are in the market today.

False

T/F: The venture capital pool is rapidly declining due to overfunding.

False

Which of the following is not typically identified as a bootstrapping technique?

Hiring seasoned veterans

Which of the following statements about raising capital is true?

It often takes a great deal of time to raise capital.

The main objective of Regulation D is to

Make it easier and less expensive for small ventures to sell stock

The Regulation D exemptions include all of the following except

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

Which of the following statements is not true of venture capitalists?

They are interested in managing firms themselves

T/F: Corporate venture capital can offer strategic and tactical advice, an operating budget, and credibility but started to decline in 2017, and this trend is expected to continue.

false

T/F: Entrepreneurs with new ventures often use debt financing out of choice, not necessity.

false

T/F: Equity financing is money invested in the venture with legal obligations to repay the principal amount or pay interest on it.

false

T/F: Regulation D augments the regulations for reports and statements required for selling stock to private parties, friends, employees, customers, relatives, and local professionals.

false

T/F: Venture capitalists, surprisingly, require little information before they make an investment.

false

Venture capital in the United States has been highest in which of the following?

health care

SBIC stands for

small-business investment companies.

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

Rule 503

T/F: Venture capitalists are quick to invest.

false

Which of the following would be most commonly used for long-term financing?

insurance companies

Advantages of debt financing include all of the following except

regular interest payments

T/F: When using P2P lending, one potential danger may be an uncertain regulatory environment.

true

_____ bank loans are made on a discounted value of the receivables pledged.

Accounts receivable financing

T/F: A method of raising capital is through the private placement of securities.

true

T/F: Informal risk capitalists are those who have already made their money and now seek to help new ventures.

true

T/F: Innovation has become more global and is no longer the exclusive domain of Silicon Valley and Route 128 in Boston.

true

T/F: Social lending sites are different from so-called microlending sites.

true

T/F: Sophisticated investors are wealthy individuals who invest more or less regularly in new or early- and late-stage ventures.

true

T/F: Trade credit is given by suppliers who sell goods on account.

true

T/F: Use of debt to finance a new venture involves a payback of the funds plus an interest fee (interest) for the use of the money.

true

T/F: Large ventures often use private placements as a method of raising capital.

false

T/F:Sophisticated investors are wealthy individuals who invest more or less regularly in new or early- and late-stage ventures.

true

Which of the following is one of the most important questions for entrepreneurs to ask regarding venture capitalists?

what is it like to work with their firm?


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