chapter15 quiz
According to the Global Entrepreneurship Monitor, entrepreneurs need on average of ________ to start their businesses.
$15,000 to $22,000
Out of every 100 business plans that a venture capital firm receives, it will invest in ____ of them.
1
In a typical year, small businesses borrow more than:
1 trillion
Since 2001, the average number of companies that make initial public offerings in the United States is:
108
In 1998, companies backed by venture capital that made initial public offerings (IPOs) completed their IPOs within 3 years of their initial venture capital investment; today venture-backed companies that go public take ______ year(s) to make their IPOs.
11
The average size of a microloan under the SBA's microloan program is:
13,000
Angel investors seek, on average, about a _____ percent ownership stake in the companies in which they invest.
20
Small businesses in the United States have ____ million bank loans with a total outstanding balance of _____ billion.
24.2: 599
The average corporate venture capital investment in a small company is:
28.3 million
The average angel investment in a small company is ______.
331,000
Traditionally, about what percentage of venture capital investments go to companies in the start-up and seed phases?
4
Small and midsize banks approve ___ percent of small business loan requests; large banks approve ___ percent of small business loan requests.
49; 23
According to the Global Entrepreneurship Monitor, entrepreneurs in the United States rely on personal savings for ___ percent of their start-up companies' total funding.
64
Which Small Business Administration (SBA) program accounts for the majority of the SBA's lending activity?
7(a) loan guaranty program
What percentage of angel investors' investments in businesses lose money, returning less than the angels' original investment?
70 percent
Credit unions are nonprofit financial cooperatives that promote saving and provide loans to their members, including entrepreneurs. What percentage of small business loans do credit unions provide?
9 percent
Which method of financing involves entrepreneurs tapping the power of the Internet through sites such as Kickstarter, Rock the Post, IndieGoGo, and others, to post their elevator pitches and raise up to $1 million per year from ordinary people, who invest as little as $100?
Crowdfunding
Which of the following statements about financing a business is false?
The money simply is not out there; entrepreneurs must rely on their own capital to start businesses today.
are programs that often are sponsored by universities or communities that provide select business start-ups a small amount of seed capital and a wealth of additional support, such as a work space, access to office equipment, mentors, and others.
accelerators
Many private individuals invest in promising business start-ups. About 12.4 million people in the United States are considered ___________, people who have a sustained net worth (excluding their primary residence) of at least $1 million or annual income of at least $200,000.
accredited investors
The percentage of an asset's value that an asset-based lender will lend to a small business is the _______ rate.
advance
Which of the following statements about angel investors is false?
although investing is an important source for capital
invest $21.3 billion annually in more than small 64,000 companies, most of them in the start-up phase, making them one of the most important sources of external equity capital for small businesses.
angels
fter investing her own money, Annie Pratt needed $25,000 to start a small gourmet ice cream shop and approached her parents for a loan. Annie agreed to repay the loan with interest in 60 monthly installments beginning one year from the day she opened her shop. Her parents agreed and provided Annie the start-up capital she needed. What type of capital did Annie get from her parents?
debt
After investing her own money, Annie Pratt needed $25,000 to start a small gourmet ice cream shop and approached her parents for the money. Instead of asking for a loan, however, Annie asks her parents to become investors in her business. They agree and invest $25,000 in Annie's start-up business. What type of capital did Annie get from her parents?
equity
Lake Murray Marine is a boat dealership located on a lake near a sizeable metropolitan area. Which of the following types of loans would be most appropriate for Lake Murray Marine to finance its inventory of boats?
floor planning
The interest rates that small businesses pay on loans are
higher than the rates that big businesses pay because of the higher risk associated with making loans to small companies.
________ loans have a preset limit and allow a small business to borrow any amount up to that ceiling at any time and allow business owners to smooth out their business's uneven cash flow.
line of credit
The ______ program works through 11 federal agencies and awards grants to small companies that are researching and developing promising technology that they want to commercialize.
small business innovation research
Which of the following statements about initial public offerings (IPOs) is false?
the number of companies with less than 25 million in annual sales
Which of the following statements about the Small Business Administration's lending programs is false?
the sba's most popular loan program is one that makes direct loans to small businesses at below-market interest rates
Angel investors are most likely to finance start-ups with capital requirements in the _______ range.
$10,000 to $2 million
