Prin of Entrepreneurship Exam 2 - MindTap Questions

An LLC exhibits which characteristics of a corporation? (Select all that apply.)

1. Limited liability 2. Centralized management 3. Continuity of life 4. Free transferability of interests

For startups that receive captial investment, which of the following is true? (Select all that apply)

1. The benefits outweigh the risks = 2. There appears to be a large market potential 3. Three out of four startups fail

What happens in the chasm? (Select all that apply.)

1. The early adopters stop buying. 2. The early majority isn't ready to buy the product.

Investment deals consist of which four compnets? (Select all four)

1. The level of risk invloved 2. The timing and use of the invesment moneys 3. The return to the founders

A proven consequence of social media addiction is: (Select all that apply.)

1. increasing depression 2. a feeling of isolation 3. an increase in anxiety disorders

If the company is in revenue and looking to expand operations, which investment stage is the company in?

Series B

Which of the following is one of the four key activities for which resource decisions must be made?

Distribution channels

Before starting a business you should:

Do feasibility analysis

What serious mistake did the entrepreneur described in the text with a software-as-service startup make that cost him a lot of money?

Doesn't understand the needs of his customers

To rightly consider that you have captured the mass market, which group of adopters would you want to have adopt your product?

Early majority

True or False? In a lean startup, we assume we know the customer.

False

True or False? In the rapid growth stage, you will probably not need extra capital as your business is generting revenue

False

True or False? Invesotr money can be used to pay off the debts you have incurred to date

False

True or False? Investors always require a business plan before investing.

False

True or False? Social media is, for the most part, harmless.

False

True or False? The Technology Readiness Level is useful to let investors know that you are using computers and data in your business.

False

True or False? The strongest proof of concept is a prototype.

False

True or False? With enough mone, you can makek any business concept a success

False

True or false? Bootstrapping is about starting a venture with as little money as possible from people outside the founding team

False

True or false? The "valley of death" refers to that stage of the growth cycle when a technology becomes obsolete

False

Which of the following is NOT a possible stakeholder in a new venture?

Government

What is the first step in the process of preparing to write a business plan?

Identify who is responsible for what

This group loves technology and is always the first to recognize the value of a technology.

Innovator

This group is highly resistant to change.

Laggards

Those who are reluctant to adopt until peer pressure gets them to adopt

Late majority

Which of the following is a startup resource? (Select all that apply.)

People, Financial resources, Intellectual resource, Physical assets

Which of the following is one of the top funding sources that entrepreneurs tap in the beginnning? (Select all that apply)

Personal savings, credit cards, and friends and family

What is the accounting term for your business' sources of income?

Revenue

If the company has established product and a good market fit with a customer basae that is growth fast, which investment stage is the company in?

Series A

If the company is rapidly growing in multiple markets, which investment stage is the company in?

Series C

To help you make decisions that might bring down the cost of starting your business, you should break out cash needs into types of capital resources. Which of the following are these types of capital? (Select all that apply.)

Working capital, Startup expenses, Capital expenditures, Safety margin

The business plan preparation process includes:

Working diligently to get the job done, identifying who is responsible for what, developing a timeline and tasks

Sources of non-dilutive funding include all the following EXCEPT:

angel investors

All the following are elements of a one-paragraph marketing plan EXCEPT the:

broad market and industry

What is the most important resource for new ventures?

cash, investor captial, savings, and loans

All the following are metrics to measure the effectiveness of social media tools EXCEPT:

cost per click

Choose the best answer to complete the following sentence. The purpose of a business process map is to:

detail how information flows through the business.

What are the CRITICAL factors that enter into a decision about the legal form of organization—that is, factors that dictate the form you must use? (Select all that apply.)

1. You have co-founders and expect initial losses for the first two years 2. Your inability to assume personal liability for claims against the business 3. You intend to grow the business to a substantial size

This group will adopt once they're sure the product has real benefits.

Early majority

True or False? A nonprofit corporation is not permitted to make a profit.

False

True or False? A sole proprietorship is a legal entity that has a sole owner who is responsible for all profits and losses.

False

True or False? After validating the market, you should prepare financial statements.

False

True or False? Brand image is about how you convey the effectiveness of your brand in the market.

False

True or False? Customers perceive value in and make purchase decisions based on your product's features.

False

True or False? If you don't see quick results from your marketing plan, it's important that you revisit it and change direction so as to not waste time.

False

True or False? If you want to retain earnings for expansion, an S-Corporation will enable you to do that.

False

True or False? Nonprofit corporations are always tax exempt, so donors can get a tax write-off.

False

True or False? Once you believe you know your customer, you can safely spend money on marketing.

False

True or False? Once you choose the correct legal form of organization, it should not be changed.

False

True or False? Pricing should be designed to cover total costs.

False

True or False? Rasing money will be quick if you tap the right people

False

True or False? Social media is necessary to success in the 21st century

False

Which of the following are lenders' interests in the business? (Select all that apply.)

The company's margins, risk protection, collateral

True or Fasle? When raising money, you should always have a backup plan even if the investor looks prmoising

True

True or fasle? Angel investors often invest between the friends and family round of captial and professional venture captial

True

Cal Newport describes social media as a:

great source of entertainment

True or False? When you successfully acquire customers, it's easy to sell them more products.

True

At the beginning of your executive summary, you want to answer which three questions? (Select all three.)

Why is this idea compelling, what is your competitive advantage, what problem are you solving

Startup resources consist of:

all of the above

Customers typically recognize three types of price: the price normally paid, which is the _____; the price compared to a substitute product, which is the _____; and the price paid for specials, which is the _____.

standard price; relative price; sale price

Corporations are different from all other forms in what ways? (Select all that apply.)

1. A corporation is a legal entity 2. A corporation can sue and be sued, acquire and sell real property, and lend money. 3. Corporations require the establishment of a board of directors

Venture capitalists typically look for which of the following when making investment decisions (Select all that apply)

1. A liquidity opportunity 2. Validation of the business model with customers 3. The possibility for a unicorn 4. The amount of money to be invested and its purpose

At the feasibility stage, what are the three most important financial questions? (Select all three.)

1. Can we keep overhead to a minimum? 2. Can we make money? 3. How long will it take to be self-sustaining?

What are consumers' expectations going forward? (Select all that apply.)

1. Consumers want experiences targeted to their precise needs. 2. They want experiences with no learning curve. 3. Consumers want to interact with anyone, anytime, anywhere as easily as possible.

We study the adoption-diffusion curve because: (Select all that apply.)

1. It tells us who adopts technology and when. 2. We want to know how long it will take to mainstream our product 3. We must manage supply and demand. 4. We can be more competitive

Marketing has been described by the "5 Ps". What are they? (Select all five.)

1. Product 2. Promotion 3. People 4. Place 5. Price

What are the three broad types of risk that an entrepreneur faces and can manage? (Select all three.)

1. Risks that are easy and cheap to overcome but which can produce large rewards 2. Risks that result from decisions that take you down the wrong path—sunk costs 3. Deal-killer risks that might prevent the launch of the business

What are some sources of sales for startups? (Select all that apply.)

1. Subscriptions 2. Products 3. Services

Which of the following is sales growth a function of? (Select all that apply.)

1. Technological innovations 2. Market growth 3. Product/service innovations

Which of the following are components of a customer journey map? (Select all that apply.)

1. Whether interactions reinforce the customer's expectations 2. What customers need. 3. How customers view the company. 4. Points where the company does not use the data collected.

Which of the following is determined by where your business lies in the value chain? (Select all that apply.)

1. Whether your company is a manufacturer, distributor, or retailer 2. What your company's profit margins will be 3. How much risk you will need to take 4. Who your customers are

Which of the following is true about raising captial from investors? (Select all that apply)

1. You will spend alot of time and money away from your business 2. It can take as long as a year to raise money

Promotion is price-focused and is a _____ strategy while advertising focuses on customer benefits that are non-price focused and is a _____ strategy.

push; pull

Which of the following allows you to prove your concept? (Select all that apply.)

Building a prototype website, Selling product to customers, Getting signed purchase orders

To receive a bank loan you must demonstrate the five Cs. What are they? (Select all five)

Collateral, condition, captial, characater, and capacity

What should you NEVER do when answering a question from a potential investor?

Commit your company to a change in course

Where do venture capitalists usually get the money to invest? (Select all that apply)

Corporations and wealthy people

Which of the following metrics would be important to a startup business that produces self-improvement videos for sale direct to consumers online? (Select all that apply.)

Customer acquisition costs, Monthly burn rate, Average order size, Viral coefficient

What does Newport believe the market values in the 21st century?

Things that are rare

True or False? An Iowa State College study found that most farmers waited to see whether the first new-product trials were successful.

True

True or False? Before you do your marketing plan, you need to make sure you have segmented your customer base.

True

True or False? Both investors and lenders expect that the entrepreneur has invested capital in the new venture.

True

True or False? Both investors and lenders want to understand the risks the business faces and how their investment will be protected.

True

True or False? Corporations account for about 62 percent of all business receipts

True

True or False? Every company experiences seasonality.

True

True or False? In Stage One of the growth funding stages, you are typically looking for friendly money

True

True or False? In a partnership, a partner is personally liable for the business debts and obligations of the other partners.

True

True or False? It's important to understand every possible aspect of the customer's life

True

True or False? Ratios are used to compare changes in a business from period to period and to analyze a company's performance.

True

True or False? The importance of the lifetime value of a customer is that it tells you how much you can spend on acquisition

True

True or False? The more money you have, the more mistakes you make

True

True or False? The original marketing plan focuses on introducing the company and creating awareness for its products and services.

True

True or False? You are most likely to write a business plan because a banker or investor asked you to.

True

True or False? You should be able to condense your marketing plan into one paragraph

True

True or False? You should not discuss what you think your business is worth in your business plan

True