exam 3 Entrepreneurship chapter 11

Which of the following are true about using outside capital for funding a startup?

-It generally takes around two to six months to raise outside capital or to conclude that there is no outside capital available. -Outside capital is not provided without the expectation of getting a good return

Which of the following are categories of equipment financing? (Check all that apply.)

Financing used equipment already owned by the company Sale-leaseback financing Financing the purchase of new equipment

_____ includes (1) broad provisions created to simplify private offerings, (2) general definitions of what constitutes a private offering, and (3) specific operating rules—Rule 504, Rule 505, and Rule 506.

Regulation D

True or false: Regulation D fails to provide rules governing the notices of sale and the payment of any commissions involved.

This is false.

To ensure repayment, bank loans are based on the

assets or the cash flow of the venture

Which of the following is true about accounts receivable loans?

Accounts receivable act as a good basis for a loan when the customer is well known and creditworthy.

The ______ refers to the tangible collateral valued higher than the amount of money borrowed.

Asset base loans

______ are most often the source of short-term funds commonly used by entrepreneurs when collateral is available.

Commercial banks

Match the phases of the Small Business Innovation Research program (in the left column) with their descriptions (in the right column). phase 3

Funds from the private sector or regular government procurement contracts are required to commercialize the developed technologies in this phase.

Which of the following are disadvantages of using outside capital for funding a startup?

It can reduce the venture's flexibility and impact the direction, drive, and creativity of the entrepreneur.

Identify a true statement about the Small Business Innovation Research (SBIR) program that was created as part of the Small Business Innovation Development Act.

It offers research and development funds to small businesses from all federal agencies with budgets in excess of $100 million.

Identify a true statement about the terms in a contract in a research and development limited partnership.

The liability for any loss suffered is borne by the limited partners.

Which of the following is true about limited partners in a research and development partnership?

The limited partners share in the profits when the technology is successfully developed in the later years.

Match the phases of the Small Business Innovation Research program (in the left column) with their descriptions (in the right column). phase 2

The money granted is to be utilized to develop prototype products or services in this phase.

Match the phases of the Small Business Innovation Research program (in the left column) with their descriptions (in the right column). phase 1

The purpose in this phase is to decide the technical feasibility of the research effort and evaluate the quality of the company's performance through a considerably small monetary commitment.

Identify a true statement about the sponsoring company in a research and development partnership.

The sponsoring company provides the base technology to the partnership in exchange for money.

True or false: The risk in a venture increases with the increase in the amount of leverage.

True

Commercial banks provide funds in the form of

debt financing