MGMT 340 Chapter 8

Which of the following does not represent a category of angel investors? Select one: a. technology angels b. corporate angels c. micromanagement angels d. entrepreneurial angels

A

Which of the following is not a major trend that has occurred in venture capital over the last few years? Select one: a. stronger small start-up investments b. more specialized funding c. emerging syndicated deals d. more innovation

A

Which of the following would be most commonly used for short-term financing? Select one: a. trade credit b. finance companies c. insurance companies d. leasing companies

A

_____ bank loans are made on a discounted value of the receivables pledged. Select one: a. Accounts receivable financing b. Trade lending c. Convertible stock d. Peer-to-peer

A?

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? Select one: a. investing b. factoring c. leasing d. trade credit

B

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

B

Which of the following terms is synonymous with social lending? Select one: a. tax lending b. peer-to-peer (P2P) lending c. accounts receivable lending d. government-backed lending

B

_____ is one of the disadvantages of going public. Select one: a. Value b. Form 8-K c. Shareholder pressure d. Liquidity

C

Advantages of debt financing include all of the following except Select one: a. potential greater return on equity. b. low interest rates that justify the opportunity cost. c. no relinquishment of ownership. d. regular interest payments

D

Short-term debt is paid back Select one: a. in six months. b. after sales. c. over an indefinite period of time. d. in one year.

D

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

False

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

False

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

False

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

True

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

True

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

True

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. (T/F)

True

Which of the following is a type of equity financing? Select one: a. loan without warrants b. convertible debentures c. loan with warrants d. common stock

D

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

False

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

False

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

True

When starting a business, which of the following sources of financing is least likely to be used? Select one: a. insurance companies b. leasing companies c. factors d. trade credit

A

Which of the following is not a stage of the evaluation process? Select one: a. initial screening b. final evaluation c. beta-testing

C

Venture capital in the United States has been highest in which of the following? Select one: a. food services b. data mining c. nanotechnology d. health care

D

A disadvantage of debt financing is Select one: a. regular interest payments. b. inhibition of growth and development due to equity investments. c. possible cash flow enhancement. d. relinquishment of ownership.

A

According to the text, which of the following could be considered a "deal killer" by a venture capitalist? Select one: a. the excessive founder salaries b. the entrepreneur's education c. the entrepreneur's travel expenses d. the humility of the management team

A

Financing includes all of the following except Select one: a. equitable payback. b. the owner's money. c. seed capital. d. angels.

A

SBIC stands for Select one: a. small-business investment companies. b. small business in capital. c. sources of business investment companies. d. securities, bonds, investment, capital.

A

Long-term debt is used for Select one: a. a rainy day fund. b. the purchase of property or equipment. c. the payment of payroll. d. recurring purchases

B

Evaluation of new-venture proposals includes all the following processes except Select one: a. oral presentation. b. evaluation of the business plan. c. a product prototype. d. initial screening.

C