Ch. 8 kuratko quiz
T/F: Crowdfunding provides entrepreneurs with access to beta-testing and market feedback.
True
T/F: Frugality is deemed a bootstrapping technique.
True
T/F: Informal risk capitalists are often referred to as business angels.
True
T/F: P2P lenders charge fees for brokering and servicing loans and collect penalties for late payments.
True
T/F: Sources of debt financing include trade credit, accounts receivable financing, factoring, and finance companies.
True
Which of the following is not one of the most common questions typically required to be answered by entrepreneurs seeking funding?
What exact date will you repay the money?
Which of the following is not a question commonly asked by banks of entrepreneurs?
What interest rate did you have in mind
Which of the following is not a stage of the evaluation process?
Beta-testing
Approximately how many commercial banks are there in this country?
about 5,500
Which of the following is a type of equity financing?
common stock
One of the advantages of public offerings is
image.
Short-term debt is paid back
in one year
Which of the following would be most commonly used for intermediate-term financing?
leasing companies
When going public with public offerings an advantage might be the
size of the company's capital amount.
According to the text, which of the following could be considered a "deal killer" by a venture capitalist?
the excessive founder salaries
Which of the following would be most commonly used for short-term financing?
trade credit
T/F: A good idea is important, but a good management team is even more important.
true
When securing a bank loan, which of the following is not a question an entrepreneur should be prepared to answer?
What is the price of your product?
Which of the following was a significant contributor to job growth, with the creation of 263,950 new jobs in the United States in 2016?
angel investment
The most common source of debt financing is
commercial breaks
Financing includes all of the following except
equitable payback
Which of the following is a source of capital for entrepreneurs?
equity
Because of how they are structured, traditional industries such as textiles, furniture manufacturing, and clothing manufacturing commonly use which of the following debt financing sources?
factoring
T/F: Peer-to-peer lenders are friends of the entrepreneur who want to invest in the new venture.
false
Which of the following is an important question for the entrepreneur to ask when evaluating the venture capitalist?
how many deals has the firm actually made in this field?
When starting a business, which of the following sources of financing is least likely to be used?
insurance companies
Major trends in the venture capital field today include all of the following except
less specialized and more homogenous funds
Venture capitalists are experienced professionals who provide a full range of services for new ventures including
management consulting.
Which of the following is not one of the eight critical factors that venture capitalists use in the evaluation of new ventures?
managerial structure
Informal investors find projects to invest in through
network of friends
Equity capital is
not a loan but a form of stock
Which of the following terms is synonymous with social lending?
peer to peer (P2P) lending
Financial equity instruments, which give investors a share of the ownership, may include
preferred stock.
A disadvantage of debt financing is
regular interest payments
_____ is one of the disadvantages of going public.
shareholder pressure
Which of the following is not a major trend that has occurred in venture capital over the last few years?
stronger small start-up investments
Which of the following does not represent a category of angel investors?
technology angels
Long-term debt is used for
the purchase of property or equipment.
Frugality is deemed a bootstrapping technique.
true
T/F: Common stock is the least basic form of ownership.
False
T/F: Only a small number of informal risk capitalists are in the market today.
False
T/F: The venture capital pool is rapidly declining due to overfunding.
False
Which of the following is not typically identified as a bootstrapping technique?
Hiring seasoned veterans
Which of the following statements about raising capital is true?
It often takes a great deal of time to raise capital.
The main objective of Regulation D is to
Make it easier and less expensive for small ventures to sell stock
The Regulation D exemptions include all of the following except
Rule 503-placements of less than $500,000.
Which of the following statements is not true of venture capitalists?
They are interested in managing firms themselves
T/F: Corporate venture capital can offer strategic and tactical advice, an operating budget, and credibility but started to decline in 2017, and this trend is expected to continue.
false
T/F: Entrepreneurs with new ventures often use debt financing out of choice, not necessity.
false
T/F: Equity financing is money invested in the venture with legal obligations to repay the principal amount or pay interest on it.
false
T/F: Regulation D augments the regulations for reports and statements required for selling stock to private parties, friends, employees, customers, relatives, and local professionals.
false
T/F: Venture capitalists, surprisingly, require little information before they make an investment.
false
Venture capital in the United States has been highest in which of the following?
health care
SBIC stands for
small-business investment companies.
Regulation D defines separate exemptions that are based on the amount of money being raised. Which of the following is not a rule that accompanies these exemptions?
Rule 503
T/F: Venture capitalists are quick to invest.
false
Which of the following would be most commonly used for long-term financing?
insurance companies
Advantages of debt financing include all of the following except
regular interest payments
T/F: When using P2P lending, one potential danger may be an uncertain regulatory environment.
true
_____ bank loans are made on a discounted value of the receivables pledged.
Accounts receivable financing
T/F: A method of raising capital is through the private placement of securities.
true
T/F: Informal risk capitalists are those who have already made their money and now seek to help new ventures.
true
T/F: Innovation has become more global and is no longer the exclusive domain of Silicon Valley and Route 128 in Boston.
true
T/F: Social lending sites are different from so-called microlending sites.
true
T/F: Sophisticated investors are wealthy individuals who invest more or less regularly in new or early- and late-stage ventures.
true
T/F: Trade credit is given by suppliers who sell goods on account.
true
T/F: Use of debt to finance a new venture involves a payback of the funds plus an interest fee (interest) for the use of the money.
true
T/F: Large ventures often use private placements as a method of raising capital.
false
T/F:Sophisticated investors are wealthy individuals who invest more or less regularly in new or early- and late-stage ventures.
true
Which of the following is one of the most important questions for entrepreneurs to ask regarding venture capitalists?
what is it like to work with their firm?
