Everfi- Marketplaces - Startup to IPO

When companies go public they get a direct say in choosing the price of their stocks.

True

Imagine you own an established startup with growing profits. You are looking for funding to greatly expand company operations. What method of financing would be best for you?

Going public

A(n) _________ is a person who starts a new business and assumes all the risks and rewards of running the business.

Entrepreneur

Companies already on the stock market get to choose the price of their stocks.

False

Which of the following is an advantage of going public?

Ability to attract many investors

Which of the following statements about entrepreneurs is TRUE

Entrepreneurs are willing to take risk.

When a company "goes public," only a small amount of investors are allowed to invest in the company.

False

When a company is attempting to go public, they will hire an investment bank to...

Figure out how much money to raise & Create a prospectus

Which of the following steps is NOT involved in going public?

Finding private investors to invest

Which of the following are disadvantages of going public?

Giving up some ownership& Need to meet expensive legal requirements Losing some control over company decisions

What are some common traits good entrepreneurs have?

They take calculated risks.&They try to solve problems by using new products and processes.

If an entrepreneur says they are using "bootstrap financing," what are they referring to?

They used their own money to start their business.

Imagine you've used your own money to develop your business idea. Now you need more funding to keep growing. Which financing method would be available to you at this stage?

Angel investing

Imagine you are an entrepreneur starting a new video game company. What kind of financing would you most likely use to test out your new business idea?

Bootstrapping

What method of financing do entrepreneurs often use when they are first developing their business idea?

Bootstrapping

Which of the following statements about entrepreneurs is FALSE?

Entrepreneurs aren't exposed to any risk when starting a new business.

What is the difference between debt financing and equity financing?

Equity financing involves selling shares of ownership in the company while debt financing does not.

When a private company wants to offer stock on the stock market, they go through the _______ process.

Initial Public Offering

In finance, the acronym IPO stands for:

Initial. Public. Offering.

The price of company stocks already trading on the stock market are determined by supply and demand.

True

When a company "goes public," investors anywhere can buy shares of ownership in the company.

True

Imagine you own a successful startup company that's been doing well for several years. You think you can grow your company if you had more industry connections. What method of financing would be best for your company at this stage?

Venture capital

Which of the following statements about the IPO process is FALSE?

Companies must seek out private investors for the company.

Which of the following statements about equity financing is FALSE?

Companies often have to pay interest when they use equity financing.

Which of the following statements about debt financing is FALSE?

When a bank gives a company a loan, they become partial owners of the company.