Chapter 7 QUIZ

True

About half of all start-ups use credit cards as a source of financing.

True

An entrepreneur is an individual willing to take the risk of owning and operating a business.

True

Angel investors are wealthy individuals who provide financing to promising new start-up companies.

True

Entrepreneurs often mention that the primary motivator for launching a new business is the opportunity to make more money.

True

In 2010, U.S. entrepreneurship rates reached their highest level in 15 years. This is seen as a hopeful sign, because job seekers become potential job creators.

True

Internal locus of control refers to a firm belief that the individual is personally responsible for what happens in his or her life.

True

Juan was recently laid off from Breeze Motors and has stopped looking for a job after numerous rejections. He has now focused on starting a new business. Juan is an example of a "necessity entrepreneur."

False

Most entrepreneurs have a very realistic appreciation of their own strengths and weaknesses.

False

Most small business owners start their businesses with the intention of changing the world through trans-formative growth.

True

One advantage small businesses often enjoy is the ability to keep overhead costs to a minimum due to the fact that the owner wears several hats.

False

Over 50 percent of entrepreneurs finance their new businesses with loans provided by comm

False

People who face discrimination that limits their economic opportunities in corporate America are likely to find that entrepreneurship offers even less attractive opportunities.

True

Phillie Truper wants to start a new business but lacks sufficient personal financial resources. She has asked banks and other lenders for loans, but they have turned her down, telling her that her proposal is too risky. Phillie might find that the Small Business Administration could help her get a loan from one of these lenders by providing a partial loan guarantee.

False

Steve Jobs would not be considered entrepreneurial b/c he developed his products while working for Apple, Inc.

False

Successful entrepreneurs are seldom visionaries. Instead, their strength is the ability to take the abstract ideas of others and turn them into successful businesses.

True

Successful entrepreneurs typically view their failures as opportunities to learn, so that they can do better next time.

True

The majority of new firms are funded with the personal resources of the founder.

False

The vast majority of the richest individuals in the U.S. earned their wealth by obtaining employment in major corporations and then working their way into positions of senior management within these organizations.

True

When borrowing money from family and friends to start a business, it is a good idea to keep the loan arrangements on a professional basis.

False

peer-to-peer lending is NOT considered a good source of funds for business start-ups b/c of their unfavorable terms.