Entrepreneurship

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One of the advantages of public offerings is

liquidity

When one designs a unique good or service, the individual is said to have used a(n) _____ approach to starting the business.

new-new

The person who sells the franchise is usually required to do all of the following except:

pay a fee

Which of the following is not a type of debt financing?

private placement

Advantages of debt financing include all of the following except:

regular interest payments.

Crowdfunding is a growing practice for entrepreneurs to seek funding for their ventures by raising monetary contributions from a large number of people via the Internet.

true

Equity financing is money invested in the venture with legal obligations to repay the principal amount of interest or interest rate on it.

true

In negotiating a deal to purchase an existing business, it is possible to request that the seller retain a minority interest in the firm.

true

Informal risk capitalists are often referred to as "business angels."

true

An agreement not to compete is also known as

a legal restraint of trade.

An additional consideration to keep in mind when negotiating to purchase an existing business includes requesting that the seller retain _____ in the firm.

a minority interest

When should a potential franchisee receive the FDD (Franchise Disclosure Document)?

at least ten days before signing a contract or paying any money

The most common source of debt financing is

commercial banks

The social and economic environment affecting the local and regional entrepreneurship is now commonly referred to as:

entrepreneurial ecosystem

Because the advantages of going public outweigh the disadvantages, it is in a corporation's best interest to go public.

false

Check My Work Franchisees have the option of whether to use the logo and symbols of the franchisor

false

Regulation D augments the regulations for reports and statements required for selling stock to private parties, friends, employees, customers, relatives, local professionals.

false

A _____ is a system of distribution that enables a supplier to arrange for a dealer to handle a specific product or service under certain mutually agreed upon conditions.

franchise

The individual who buys the franchise is the

franchisee.

Which of the following is an intangible asset?

goodwill

Which of the following statements is not true of venture capitalists?

They are interested in trying to manage firms themselves

Check My Work Crowdfunding campaigns provide entrepreneurs with a number of benefits including which of the following?

all of the above

Venture capitalists, surprisingly, require little information before they make an investment.

false

Major trends in the venture capital field today include all of the following except

less specialized and more homogenous funds

Which of the following is a danger not associated with peer-to-peer (P2P) lending?

privatization of business plans

A disadvantage of debt financing is

regular interest payments

Private placement is a method of raising capital through the private placement of securities.

true

Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach.

true

Use of debt to finance a new venture involves a payback of funds plus an interest fee for the use of the money.

true

Who must negotiate a final deal to purchase a business?

The potential buyer

Perhaps the greatest advantage of buying a franchise, as compared to starting a new business or buying an existing one, is that the franchisor will usually provide both training and guidance to the franchisee.

true

When purchasing an existing business, the prospective owner should conduct an assessment of the business's current group of employees.

true

Which of the following is not a key question a prospective buyer needs to ask in buying a business?

What is the owner's personal net worth?

Which of the following includes information about the proposal size, financial projections, investment recovery, competitive advantage, and company management?

a business plan

The inventory should be examined for which of the following?

all the above

Which of the following does not represent a category of angel investors?

amateur angels

The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture.

true

The prospective investor should get as much information as possible on the franchisor.

true

An informal risk capitalist is referred to as:

a business angel

Sophisticated investors are wealthy individuals who invest more or less regularly in new and/or early- and late-stage ventures.

true

Sources of debt financing include trade credit, accounts receivables, factoring, and finance companies.

true

The Franchise Disclosure Document (FDD) is a legally required disclosure document that must be presented to potential franchisees during presale discussions.

true

The rise of incubators, accelerators, and entrepreneurial ecosystems may be an important pathway for entrepreneurs to pursue.

true

The terms upside gain and downside loss refer to the profits the business can make and the losses it can suffer.

true

Researchers developed a "Newness Framework" to help depict the differing dimensions of newness that ventures could exhibit, which include which of the following dimensions:

Technology newness

An advantage to buying an ongoing business is

all of these

The main objective of Regulation D is to

make it easier and less expensive for small ventures to sell stock

Which is an important question for the entrepreneur to ask when evaluating the venture capitalist?

Is the person someone with whom the entrepreneur can work?

Which of the following is an entity that helps new ventures to develop by providing services such as management training and office space?

business incubator

The entrepreneur should ask the venture capitalist _____ questions.

an unlimited number of


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