Ent. hw ch 8

which of the following is an important question for the ent. to ask when evaluating the venture capitalist? a. Is the person someone with whom the entrepreneur can work? b. Is the person a close relative? c. Is the person a college graduate? d. Is the person wealth

A. is the person someone who which the ent. can work with.

which of the following terms is not synonymous with social lending a. banking 2.0 b. peer-to-peer (P2P) lending c. crowdfunding d. commercially viable lending

D. commercial variable lending

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

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

True

the main objective of reg d is a. make it easier and less expensive for small ventures to sell stock. b. increase investment in private placement. c. regulate new small-business investment. d. reduce debt financing by small enterprises

A. make it easier and less expensive for small ventures to sell stock

an informal risk capitalist is refered to as a. a retiree. b. a business angel. c. someone with extra money to invest but who is not interested becoming an entrepreneur. d. your neighbor.

B. a business angel

the ent should ask how many questions of the venture capitalist? a. no b. an unlimited number of c. exactly twenty d. at most ten

B. an unlimited number of

which of the following does not represent a category of angel investors a. entrepreneurial angels b. micromanagement angels c. amateur angels d. corporate angels

C. amateur angels

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

D. regular interest payments

the most common source of debt financing is a. finance companies. b. commercial banks. c. trade credit. d. factoring.

b. commercial banks

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

false

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

true

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

true

which of the following is not a type of debt financing a. trade credits b. finance companies c. private placement d. accounts receivables

c. private placement

which of the following is a type of debt financing a. loan without warrants b. loan with warrants c. convertible debentures d. common stock

d. common stock

one of the advantages to public offering is a. disclosure. b. requirements. c. cost. d. liquidity

d. liquidity

Because the advantages of going public outweigh the disadvantages, it is in a corporation's best interest to go public. T/F

false

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

false

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

true

What is one of the most important questions for ent. to ask regarding venture capitalist a. What is it like to work with their firm? b. Are they wealthy? c. Are they good at financial computation? d. Are they good communicators?

A. what is it like to work with their firm

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

B.less specialized and more homogenous feild

which of the following is not true of venture capitalist a. They want the entrepreneur and the management to run the company. b. They are interested in trying to manage firms themselves. c. They expect high return on investments. d. They take a long time to raise venture capital.

b. they are interested in trying to manage the firms themselves

Private placement is a method of raising capital through the private placement of securities. T/F

True

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

d. regular interest payments