ENTR CH 6

a. poor financial understanding.

A common pitfall in selecting a new venture is a. poor financial understanding. b. proper objective evaluation. c. real insight into the market. d. none of these.

a. feasibility criteria approach.

An approach developed as a criteria selection list from which entrepreneurs can gain insights into the viability of their venture is the a. feasibility criteria approach. b. marketability feasibility approach. c. comprehensive feasibility approach. d. time-essence of a venture approach.

T

Feasibility analyses include technical, market, financial, organizational, and competitive analyses. a. True b. False

b. objectivity

Many entrepreneurs lack _____ for their new venture. a. commitment b. objectivity c. intelligence d. innovation

a. general economic trends and competitor data.

Market feasibility analysis relies on a. general economic trends and competitor data. b. venture capital. c. the entrepreneur's vision. d. organizational competence.

F

Most entrepreneurs are objective when they evaluate their new idea. a. True b. False

F

Most entrepreneurs are well schooled in the technology associated with their ventures. a. True b. False

b. lack of objective evaluation

Name the pitfall described by the statement, "Engineers and technically trained people are particularly prone to falling in love with an idea for a product or service." a. lack of venture uniqueness b. lack of objective evaluation c. inadequate understanding of technical requirements d. no real insight into the market

T

Obtaining external financing is considered one of the major types of problems for a new venture during its first year. a. True b. False

F

Overall market understanding rather than a time-consuming focus on market niches is sufficient for an evaluation. a. True b. False

c. inadequate understanding of costs and funding requirements

Poor financial understanding is characterized by which of the following? a. lack of product differentiation b. failure to realize the life cycle of a product c. inadequate understanding of costs and funding requirements d. failure to anticipate technical difficulties

d. rapid product obsolescence

Rapid technological advances in many industries cause a concern for __________ in new venture development. a. undercapitalization b. inadequate awareness of competitive pressures c. faulty product performance d. rapid product obsolescence

T

Solid analysis and evaluation of the feasibility of the product/service idea are critical tasks in starting a new business. a. True b. False

F

Surprisingly, growth of sales is generally not considered a critical factor in assessing new ventures. a. True b. False

F

The decision of an entrepreneur to ignore the market is a safe one if he or she is sure that the idea will be a success. a. True b. False

T

The entrepreneurial motivations of individuals relate to the entrepreneur, the environment, and the venture. a. True b. False

d. all of these

The entrepreneurial motivations of individuals usually relate to which of the following factors? a. the environment b. the entrepreneur c. the venture d. all of these

b. high-growth venture.

The type of venture that is expected to attract venture capital would most likely be a a. smaller venture. b. high-growth venture. c. corporate venture. d. lifestyle venture.

F

There is a great abundance of reliable data concerning the start-up, performance, and failure of new ventures. a. True b. False

d. prestart-up, start-up, poststart-up.

Three specific phases that a new venture goes through are a. prestart-up, start-up, evaluation. b. start-up, poststart-up, evaluation. c. beginning start-up, start-up, ending start-up. d. prestart-up, start-up, poststart-up.

a. using less debt as initial financing and generating revenue in the initial stages.

Using the failure prediction model discussed in the chapter, the risk of failure can be reduced by: a. using less debt as initial financing and generating revenue in the initial stages. b. using more debt as initial financing and generating less revenue in the initial stages. c. using more revenue to enhance more debt in the initial stage. d. all of these.

c. high-growth ventures

Venture classifications include which of the following types of venture? a. smaller copycat ventures b. hobby ventures c. high-growth ventures d. survival ventures

c. product/market problems.

Which of the following as a factor contributing to new-venture failure? a. family issues. b. good management/poor product. c. product/market problems. d. personality clashes.

a. inadequate market knowledge

Which of the following is a major reason for the failure of a new venture? a. inadequate market knowledge b. opening in the wrong location c. good product/poor marketing d. good product performance

d. all of these

Which of the following is critical to a product's success? a. timing b. marketing approach c. objectivity d. all of these