GEB 4111 Final

False

A company's goodwill is its best collateral.

False

A legal obligation to pay money in the future is called equity capital.

False

A measure of the amount of debt relative to total investment is called cost of capital.

FALSE

A privately owned company will always have greater value than a publicly owned company.

The company's stage of entrepreneurship

A solid valuation contextual factor analysis should include the following factors except

All of these

A solid valuation contextual factor analysis should include which of the following factors:

True

Borrowing money for capital investment enhances the potential for higher rates of return for the owners.

False

Community development organizations are private businesses that are authorized to make SBA insured loans to start-ups and small businesses.

FALSE

Crowd sourcing is a subset of crowdfunding

FALSE

Crowdfunding is a loan source, which means it accrues debt or equity.

FALSE

Crowdfunding is always the best source of income to fund a startup

FALSE

Crowdfunding usually requires making requests for tasks and generating infor-mation and feedback

FALSE

Debt financing does not require collateral and offers the investor some form of ownership position in the venture.

True

During the start-up phase of a small business the emphasis is on conserving what little cash the new business has.

True

Equifax is one of the four primary CRAs in the United States.

True

Giving a gift has tax implications.

cash flow

Historically, the value of a company has been largely driven by its present and projected __________.

7

How many sections does the JOBS Act include?

true

In most cases, crowdfunding does not involve or generate debt or equity

False

In the U.S., government programs are the number one source for financing small busi-nesses.

TRUE

IndieGoGo gives the option of collecting funds from a failed campaign for a high-er commission

True

Investing in multiple businesses increases the chances of offsetting possible losses in-curred from one business.

All of these factors should be considered when performing a valuation.

James is the owner of a biotechnology company and wants to conduct a valuation. He should include all of the following factors in his valuation EXCEPT:

False

Knowing one's personal worth is not important when starting a business.

True

Limited liability companies' primary advantage is that owners may easily choose whether to be taxed as an entity or have tax items pass through.

True

Majority of small business start-ups are funded by bootstrapping.

True

Money borrowed for the purpose of investment in a business is called debt capital.

Tangible assets

Most of the value in manufacturing companies come from:

FALSE

On websites like Indiegogo, do you only get your money if your campaign is suc-cessful?

True

Payments of profits to the owners of corporations are called dividends.

True

People who buy ownership rights but are not part of the management of the business are known as outside equity investors.

TRUE

Private companies do not have to adhere to the SEC disclosure rules and regula-tions

True

Reduced taxes are the most common form of institutional gift financing.

10%; $100,000

The JOBS Act states in title III that investors cannot invest more than ___ of their annual income if their income is greater than ____________?

True

The SBIR and the STTR programs require that every U.S. agency that makes research grants provide a minimum of 2 percent of its grant budget to small businesses, as defined by the SBA.

true

The best part of crowdfunding project is that they generate revenue rather than involving debt or giving up equity?

TRUE

The higher amount of leverage (debt/total assets), the greater the risk in the ven-ture.

False

The more debt that is included in the capital mix, the higher is the weighted average cost.

FALSE

The valuation of a company can always be determined objectively.

All of these are correct

Title I of the JOBS Act included a series of amendments to the all of the following EXCEPT:

All of these choices are correct

Types of Crowdfunding include

All of these are correct

Valuation Methods fall into which category:

Reward, donation, equity, lending

What are the 4 types of crowd funding mentioned in class?

In the event of an unsuccessful campaign (didn't reach goal) you can choose to take the money on Indiegogo, while you can't on Kickstarter.

What is a major difference between Kickstarter and Indiegogo?

False

When a business enters a phase of rapid growth, one of the challenges it faces is that very few sources of money are available to support its growth.

Government

Which of the following is NOT a small business administration loan program?

there is a 3-5-, or 7-year payback period.

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

Title III

Which title of the JOBS Act established the rules under which an entrepreneurial firm can raise investment capital from the general public?

Publicly held companies are required to disclose all details regarding the financial statement. Therefore the investor has more reliable information.

Why have publicly held companies a higher valuation than privately held companies (same industry, revenue, profitability, etc.)

All of these

Why should entrepreneurs know the value of their business?

FALSE

You can expect a crowdfunding campaign to fully cover the costs of bringing a product to market

false

A publicly owned company will always have a greater value than a private one.

Present and Projected Cash Flow

According to the book, historically, what factor is largely the driving force in valuing a company?

The company's culture

According to the book, which is not a key factor influencing valuation?

TRUE

Crowdsourcing is the umbrella term, under which crowdfunding falls

TRUE

Crowdsourcing requires making requests for tasks and generating infor-mation and feedback.