chapter15 quiz

According to the Global Entrepreneurship​ Monitor, entrepreneurs need on average of​ ________ to start their businesses.

$15,000 to​ $22,000

Out of every 100 business plans that a venture capital firm​ receives, it will invest in​ ____ of them.

1

In a typical​ year, small businesses borrow more​ than:

1 trillion

Since​ 2001, the average number of companies that make initial public offerings in the United States​ is:

108

In​ 1998, companies backed by venture capital that made initial public offerings​ (IPOs) completed their IPOs within 3 years of their initial venture capital​ investment; today​ venture-backed companies that go public take​ ______ year(s) to make their IPOs.

11

The average size of a microloan under the​ SBA's microloan program​ is:

13,000

Angel investors​ seek, on​ average, about a​ _____ percent ownership stake in the companies in which they invest.

20

Small businesses in the United States have​ ____ million bank loans with a total outstanding balance of​ _____ billion.

24.2: 599

The average corporate venture capital investment in a small company​ is:

28.3 million

The average angel investment in a small company is​ ______.

331,000

Traditionally, about what percentage of venture capital investments go to companies in the​ start-up and seed​ phases?

4

Small and midsize banks approve​ ___ percent of small business loan​ requests; large banks approve​ ___ percent of small business loan requests.

49; 23

According to the Global Entrepreneurship​ Monitor, entrepreneurs in the United States rely on personal savings for​ ___ percent of their​ start-up companies' total funding.

64

Which Small Business Administration​ (SBA) program accounts for the majority of the​ SBA's lending​ activity?

7(a) loan guaranty program

What percentage of angel​ investors' investments in businesses lose​ money, returning less than the​ angels' original​ investment?

70 percent

Credit unions are nonprofit financial cooperatives that promote saving and provide loans to their​ members, including entrepreneurs. What percentage of small business loans do credit unions​ provide?

9 percent

Which method of financing involves entrepreneurs tapping the power of the Internet through sites such as​ Kickstarter, Rock the​ Post, IndieGoGo, and​ others, to post their elevator pitches and raise up to​ $1 million per year from ordinary​ people, who invest as little as​ $100?

Crowdfunding

Which of the following statements about financing a business is false​?

The money simply is not out​ there; entrepreneurs must rely on their own capital to start businesses today.

are programs that often are sponsored by universities or communities that provide select business​ start-ups a small amount of seed capital and a wealth of additional​ support, such as a work​ space, access to office​ equipment, mentors, and others.

accelerators

Many private individuals invest in promising business​ start-ups. About 12.4 million people in the United States are considered​ ___________, people who have a sustained net worth​ (excluding their primary​ residence) of at least​ $1 million or annual income of at least​ $200,000.

accredited investors

The percentage of an​ asset's value that an​ asset-based lender will lend to a small business is the​ _______ rate.

advance

Which of the following statements about angel investors is false​?

although investing is an important source for capital

invest​ $21.3 billion annually in more than small​ 64,000 companies, most of them in the​ start-up phase, making them one of the most important sources of external equity capital for small businesses.

angels

fter investing her own​ money, Annie Pratt needed​ $25,000 to start a small gourmet ice cream shop and approached her parents for a loan. Annie agreed to repay the loan with interest in 60 monthly installments beginning one year from the day she opened her shop. Her parents agreed and provided Annie the​ start-up capital she needed. What type of capital did Annie get from her​ parents?

debt

After investing her own​ money, Annie Pratt needed​ $25,000 to start a small gourmet ice cream shop and approached her parents for the money. Instead of asking for a​ loan, however, Annie asks her parents to become investors in her business. They agree and invest​ $25,000 in​ Annie's start-up business. What type of capital did Annie get from her​ parents?

equity

Lake Murray Marine is a boat dealership located on a lake near a sizeable metropolitan area. Which of the following types of loans would be most appropriate for Lake Murray Marine to finance its inventory of​ boats?

floor planning

The interest rates that small businesses pay on loans​ are

higher than the rates that big businesses pay because of the higher risk associated with making loans to small companies.

​________ loans have a preset limit and allow a small business to borrow any amount up to that ceiling at any time and allow business owners to smooth out their​ business's uneven cash flow.

line of credit

The​ ______ program works through 11 federal agencies and awards grants to small companies that are researching and developing promising technology that they want to commercialize.

small business innovation research

Which of the following statements about initial public offerings​ (IPOs) is false​?

the number of companies with less than 25 million in annual sales

Which of the following statements about the Small Business​ Administration's lending programs is false​?

the sba's most popular loan program is one that makes direct loans to small businesses at below-market interest rates

Angel investors are most likely to finance​ start-ups with capital requirements in the​ _______ range.

​$10,000 to​ $2 million