ENT3003 Chapter 13 Exam 4
Why do Shark Tank investors talk about pre-money valuation?
It helps them decide how much ownership to take with their offer.
The financing funds provided to cover expenses associated with the initial public offering are ______.
bridge
How does entrepreneur, Mike Moyer, suggest to split up the startup among founders?
by contribution of time, money, and other resources
This ______ angel investor is often from big multinational and typically wants a paid position in the venture.
corporate
What is a rigorous process that involves evaluating an investment opportunity prior to the contract being signed?
due diligence
One of the important factors to an investor is knowing the ______.
entrepreneur's experience and team's successes
What type of angel is one who has already started their own business?
entrepreneurial
What is the sale of shares of stock in exchange for cash?
equity financing
A venture capitalist invests his or her own money into startups.
False
Investors do not expect the entrepreneurs to have a distribution channel set up.
False
Who is considered the father of venture capital?
George F. Doriot
One of the most successful VC seed investment returns was $78 million for $250,000 investment to ______.
Investors and entrepreneurs tend to agree on valuation.
false
Most entrepreneurs manage to make money and maintain full control of their businesses.
false
Venture capital deals started with the formation of American Research and Development (ARD) by father of venture capital, George F. Doriot.
false
A(n) ______ is a company's first opportunity to sell stocks on the stock market.
initial public offering
By taking the companies public, venture capitalists exited Uber and Lyft through what exit strategy?
initial public offering
What does PayPal co-founder Peter Thiel consider to be the number one cause of failure by entrepreneurs?
lack of a distribution channel
What angel investors want to be involved in ventures?
micromanagement
What population continues to be underrepresented by angel groups?
minorities
Bank financing is a good option when ______.
no other financing is available
Typically entrepreneurs value their companies based upon ______.
potential in chosen market
Venture capitalists tend to be ______.
professional money managers
What is the stage of financing in which small or modest amounts of capital are provided to entrepreneurs to prove a concept?
seed-stage
What spawned the growth of a whole new generation of venture capitalist companies?
smartphones and tablets
What is the stage of financing in which the money is provided to entrepreneurs to enable them to implement the idea by funding product research and development?
startup
Why is it essential for an entrepreneur to know the value of a company prior to seeing investors?
to know how much equity to give up
An important factor in thinking about seeking investment dollars is to find investors who are suitable for the stage of the company.
true
Most of the active venture capital firms operate very similarly.
true
One reason an angel may reject a pitch is for geographical reasons.
true
Unlike angel investors, venture capitalists are mostly professional money managers.
true
SELECT ALL THAT APPLY. What are the advantages of convertible debt?
-It removes the need for valuation. -It offers discounted shares. -Majority ownership remains with entrepreneur.
SELECT ALL THAT APPLY. What is the initial-stage equity financing available to entrepreneurs?
-early-stage -seed-stage -startup
What years were the dot.com era?
1990s
Where did the name "angel investor" come from?
wealthy investors who invested in Broadway productions