Prin of Entrepreneurship Exam 2 - MindTap Questions
An LLC exhibits which characteristics of a corporation? (Select all that apply.)
1. Limited liability 2. Centralized management 3. Continuity of life 4. Free transferability of interests
For startups that receive captial investment, which of the following is true? (Select all that apply)
1. The benefits outweigh the risks = 2. There appears to be a large market potential 3. Three out of four startups fail
What happens in the chasm? (Select all that apply.)
1. The early adopters stop buying. 2. The early majority isn't ready to buy the product.
Investment deals consist of which four compnets? (Select all four)
1. The level of risk invloved 2. The timing and use of the invesment moneys 3. The return to the founders
A proven consequence of social media addiction is: (Select all that apply.)
1. increasing depression 2. a feeling of isolation 3. an increase in anxiety disorders
If the company is in revenue and looking to expand operations, which investment stage is the company in?
Series B
Which of the following is one of the four key activities for which resource decisions must be made?
Distribution channels
Before starting a business you should:
Do feasibility analysis
What serious mistake did the entrepreneur described in the text with a software-as-service startup make that cost him a lot of money?
Doesn't understand the needs of his customers
To rightly consider that you have captured the mass market, which group of adopters would you want to have adopt your product?
Early majority
True or False? In a lean startup, we assume we know the customer.
False
True or False? In the rapid growth stage, you will probably not need extra capital as your business is generting revenue
False
True or False? Invesotr money can be used to pay off the debts you have incurred to date
False
True or False? Investors always require a business plan before investing.
False
True or False? Social media is, for the most part, harmless.
False
True or False? The Technology Readiness Level is useful to let investors know that you are using computers and data in your business.
False
True or False? The strongest proof of concept is a prototype.
False
True or False? With enough mone, you can makek any business concept a success
False
True or false? Bootstrapping is about starting a venture with as little money as possible from people outside the founding team
False
True or false? The "valley of death" refers to that stage of the growth cycle when a technology becomes obsolete
False
Which of the following is NOT a possible stakeholder in a new venture?
Government
What is the first step in the process of preparing to write a business plan?
Identify who is responsible for what
This group loves technology and is always the first to recognize the value of a technology.
Innovator
This group is highly resistant to change.
Laggards
Those who are reluctant to adopt until peer pressure gets them to adopt
Late majority
Which of the following is a startup resource? (Select all that apply.)
People, Financial resources, Intellectual resource, Physical assets
Which of the following is one of the top funding sources that entrepreneurs tap in the beginnning? (Select all that apply)
Personal savings, credit cards, and friends and family
What is the accounting term for your business' sources of income?
Revenue
If the company has established product and a good market fit with a customer basae that is growth fast, which investment stage is the company in?
Series A
If the company is rapidly growing in multiple markets, which investment stage is the company in?
Series C
To help you make decisions that might bring down the cost of starting your business, you should break out cash needs into types of capital resources. Which of the following are these types of capital? (Select all that apply.)
Working capital, Startup expenses, Capital expenditures, Safety margin
The business plan preparation process includes:
Working diligently to get the job done, identifying who is responsible for what, developing a timeline and tasks
Sources of non-dilutive funding include all the following EXCEPT:
angel investors
All the following are elements of a one-paragraph marketing plan EXCEPT the:
broad market and industry
What is the most important resource for new ventures?
cash, investor captial, savings, and loans
All the following are metrics to measure the effectiveness of social media tools EXCEPT:
cost per click
Choose the best answer to complete the following sentence. The purpose of a business process map is to:
detail how information flows through the business.
What are the CRITICAL factors that enter into a decision about the legal form of organization—that is, factors that dictate the form you must use? (Select all that apply.)
1. You have co-founders and expect initial losses for the first two years 2. Your inability to assume personal liability for claims against the business 3. You intend to grow the business to a substantial size
This group will adopt once they're sure the product has real benefits.
Early majority
True or False? A nonprofit corporation is not permitted to make a profit.
False
True or False? A sole proprietorship is a legal entity that has a sole owner who is responsible for all profits and losses.
False
True or False? After validating the market, you should prepare financial statements.
False
True or False? Brand image is about how you convey the effectiveness of your brand in the market.
False
True or False? Customers perceive value in and make purchase decisions based on your product's features.
False
True or False? If you don't see quick results from your marketing plan, it's important that you revisit it and change direction so as to not waste time.
False
True or False? If you want to retain earnings for expansion, an S-Corporation will enable you to do that.
False
True or False? Nonprofit corporations are always tax exempt, so donors can get a tax write-off.
False
True or False? Once you believe you know your customer, you can safely spend money on marketing.
False
True or False? Once you choose the correct legal form of organization, it should not be changed.
False
True or False? Pricing should be designed to cover total costs.
False
True or False? Rasing money will be quick if you tap the right people
False
True or False? Social media is necessary to success in the 21st century
False
Which of the following are lenders' interests in the business? (Select all that apply.)
The company's margins, risk protection, collateral
True or Fasle? When raising money, you should always have a backup plan even if the investor looks prmoising
True
True or fasle? Angel investors often invest between the friends and family round of captial and professional venture captial
True
Cal Newport describes social media as a:
great source of entertainment
True or False? When you successfully acquire customers, it's easy to sell them more products.
True
At the beginning of your executive summary, you want to answer which three questions? (Select all three.)
Why is this idea compelling, what is your competitive advantage, what problem are you solving
Startup resources consist of:
all of the above
Customers typically recognize three types of price: the price normally paid, which is the _____; the price compared to a substitute product, which is the _____; and the price paid for specials, which is the _____.
standard price; relative price; sale price
Corporations are different from all other forms in what ways? (Select all that apply.)
1. A corporation is a legal entity 2. A corporation can sue and be sued, acquire and sell real property, and lend money. 3. Corporations require the establishment of a board of directors
Venture capitalists typically look for which of the following when making investment decisions (Select all that apply)
1. A liquidity opportunity 2. Validation of the business model with customers 3. The possibility for a unicorn 4. The amount of money to be invested and its purpose
At the feasibility stage, what are the three most important financial questions? (Select all three.)
1. Can we keep overhead to a minimum? 2. Can we make money? 3. How long will it take to be self-sustaining?
What are consumers' expectations going forward? (Select all that apply.)
1. Consumers want experiences targeted to their precise needs. 2. They want experiences with no learning curve. 3. Consumers want to interact with anyone, anytime, anywhere as easily as possible.
We study the adoption-diffusion curve because: (Select all that apply.)
1. It tells us who adopts technology and when. 2. We want to know how long it will take to mainstream our product 3. We must manage supply and demand. 4. We can be more competitive
Marketing has been described by the "5 Ps". What are they? (Select all five.)
1. Product 2. Promotion 3. People 4. Place 5. Price
What are the three broad types of risk that an entrepreneur faces and can manage? (Select all three.)
1. Risks that are easy and cheap to overcome but which can produce large rewards 2. Risks that result from decisions that take you down the wrong path—sunk costs 3. Deal-killer risks that might prevent the launch of the business
What are some sources of sales for startups? (Select all that apply.)
1. Subscriptions 2. Products 3. Services
Which of the following is sales growth a function of? (Select all that apply.)
1. Technological innovations 2. Market growth 3. Product/service innovations
Which of the following are components of a customer journey map? (Select all that apply.)
1. Whether interactions reinforce the customer's expectations 2. What customers need. 3. How customers view the company. 4. Points where the company does not use the data collected.
Which of the following is determined by where your business lies in the value chain? (Select all that apply.)
1. Whether your company is a manufacturer, distributor, or retailer 2. What your company's profit margins will be 3. How much risk you will need to take 4. Who your customers are
Which of the following is true about raising captial from investors? (Select all that apply)
1. You will spend alot of time and money away from your business 2. It can take as long as a year to raise money
Promotion is price-focused and is a _____ strategy while advertising focuses on customer benefits that are non-price focused and is a _____ strategy.
push; pull
Which of the following allows you to prove your concept? (Select all that apply.)
Building a prototype website, Selling product to customers, Getting signed purchase orders
To receive a bank loan you must demonstrate the five Cs. What are they? (Select all five)
Collateral, condition, captial, characater, and capacity
What should you NEVER do when answering a question from a potential investor?
Commit your company to a change in course
Where do venture capitalists usually get the money to invest? (Select all that apply)
Corporations and wealthy people
Which of the following metrics would be important to a startup business that produces self-improvement videos for sale direct to consumers online? (Select all that apply.)
Customer acquisition costs, Monthly burn rate, Average order size, Viral coefficient
What does Newport believe the market values in the 21st century?
Things that are rare
True or False? An Iowa State College study found that most farmers waited to see whether the first new-product trials were successful.
True
True or False? Before you do your marketing plan, you need to make sure you have segmented your customer base.
True
True or False? Both investors and lenders expect that the entrepreneur has invested capital in the new venture.
True
True or False? Both investors and lenders want to understand the risks the business faces and how their investment will be protected.
True
True or False? Corporations account for about 62 percent of all business receipts
True
True or False? Every company experiences seasonality.
True
True or False? In Stage One of the growth funding stages, you are typically looking for friendly money
True
True or False? In a partnership, a partner is personally liable for the business debts and obligations of the other partners.
True
True or False? It's important to understand every possible aspect of the customer's life
True
True or False? Ratios are used to compare changes in a business from period to period and to analyze a company's performance.
True
True or False? The importance of the lifetime value of a customer is that it tells you how much you can spend on acquisition
True
True or False? The more money you have, the more mistakes you make
True
True or False? The original marketing plan focuses on introducing the company and creating awareness for its products and services.
True
True or False? You are most likely to write a business plan because a banker or investor asked you to.
True
True or False? You should be able to condense your marketing plan into one paragraph
True
True or False? You should not discuss what you think your business is worth in your business plan
True