test

A typical informal investor (Angel) will invest ________ in any one deal.

$10,000 to $250,000

Most venture capital funds prefer to invest ________ or more.

$2 million to $5 million

Between ________ of all informal (or non- venture capital) funding comes from family.

30% - 80%

A dehydrated business plan usually runs from _____ pages.

4 to 10

How long is the typical expected holding period for a second stage venture capital investment?

4-7 years

The ultimate goal of any venture capital-backed company is to realize a harvest at a price at least _____ times the original investment.

5 to 10

_______ strategies encourage a discipline of leanness, where everyone knows that every dollar counts.

Bootstrapping

Completing the Venture Opportunity Screening Exercise will remove all of the uncertainties and risks associated with a venture concept.

False

Entrepreneurship does not occur in not-for-profit companies.

False

Regarding rewards and equity, which of the following is NOT a fundamental reality with nearly any new venture?

Founders should keep most of the company to themselves.

What is the best source of funding for a startup company looking to raise $75,000 for Research and Development?

Friends and Family

What is the most likely source for early-stage equity capital of $100,000.

Informal Investors (Angels)

Which valuation method looks at different multiples (such as earnings, free cash flow, and revenue) of recent investments in similar firms?

Rule-of-Thumb Methods

Leasing enables a young company to conserve cash and can reduce its requirements for equity capital.

True

Which of the following is NOT a reality of new ventures?

Venture Capital is readily available for R&D (Research and Development) stage companies with a business plan.

Families who intend to act entrepreneurially must be focused on _______.

opportunity

The entrepreneurial process starts with the ________.

opportunity

When screening business ideas, entrepreneurs should focus first on ________.

opportunity

By ______ their capital contributions, venture capitalists preserve the right to abandon a project whose prospects look dim.

staging

What are the three driving forces of the Timmons Model?

team, opportunity, resources

The financial mindset for enterprising does NOT include which of the following characteristics:

A willingness to stick with the existing business model.

________ is defined as a multistage commitment of resources with a minimum commitment at each stage or decision point.

Bootstrapping

What is the primary source of DEBT capital for existing (not new) businesses?

Commercial banks

________ of a company can be held personally liable for its actions and those of its officers.

Directors

Which of the following does NOT accurately describe a business plan?

Easy to prepare

Which of the following harvest options is viewed as a positive motivational device because it usually creates widespread ownership of stock among employees?

Employee Stock Ownership Plan (ESOP)

Which of the following is the most expensive source of DEBT financing?

Factors

A board of advisors is an especially good alternative to a board of directors because a board of advisors is authorized to make legal decisions.

False

If a team is starting a venture that will not need outside capital, then it is appropriate to not prepare a business plan.

False

Successful entrepreneurs stick with the business plan and do not adjust to evolving opportunities.

False

The goal of valuation techniques for a start-up company is to be able to arrive at a single number.

False

The originator of the business idea should not receive equity in the new venture.

False

When is it a good idea to hire an outside professional to write the business plan?

It is NOT a good idea to hire an outside professional to write the business plan

Unlike equity investors, banks place very little weight on the quality of the management team.

Leasing enables a young company to conserve cash and can reduce its requirements for equity capital.

A(n) ______ is when a founder can gain liquidity from a business by selling it to existing partners or to other key managers in the business.

Management Buyout (MBO)

What leads and drives the financial strategy framework?

Opportunity

Which harvest option can have the negative attribute of forcing the leadership team to focus on short-term profits and performance results?

Public Offering

When pushed by a promising investor to discuss what other firms/angels you are talking to, you should:

Respectfully decline

Which of the following is NOT a worthwhile principle to guide the approach to rewards and equity sharing in creating a successful venture?

Sweat equity does not matter much.

Families comprise the dominant form of business organization worldwide, and provide more resources for the entrepreneurial economy than any other source.

True

Investors stage their capital commitments as a way to incentivize the entrepreneurial team.

True

It is in the high-growth stage that new ventures tend to exhibit a failure rate exceeding 60 percent.

True

Most advisors view outright sale as the ideal route to harvest because up-front cash is preferred over most stock.

True

Most often, family cash investments are given based on altruistic family sentiments rather than having more formal investment criteria.

True

One of the biggest mistakes aspiring entrepreneurs make is that they think too small.

True

One of the toughest trade-offs for any young company is to balance the need for start-up and growth capital with preservation of equity.

True

Shaping a harvest strategy is an enormously complicated and difficult task.

True

Short-term debt is most often used by a business for working capital and is repaid out of the proceeds of its sales.

True

Strategies that maximize the amount of money raised can be counter-productive for new and emerging companies.

True

Successful entrepreneurs say "no" to lots of opportunities.

True

The vast majority of startup entrepreneurs spend inordinate amounts of time chasing the wrong funding sources for their venture.

True

When raising equity investment capital it is important for an entrepreneur to remember that owning a smaller percentage of a larger pie is preferred to a larger percentage of a smaller pie.

True

When speaking with a venture capitalist, the entrepreneurial team should be vague when describing other potential venture capitalists they are talking to about funding.

True

Whenever possible, effective entrepreneurs seek to control rather than own the resources they need.

True

Extending _________ is one of the primary sources of working capital for many start-up and growing firms.

accounts payable

The Venture Opportunity Screening Exercise creates the foundation for the development of the __________.

complete business plan

Typical investors have to weed through _____ ideas before finding one that meets their investing criteria.

countless

Seasoned entrepreneurs know that a series of _______ is the key to success, allowing them to figure out if an idea is viable in months rather than years.

fast failures

An entrepreneur should calculate __________ to determine the external financing requirements of a new venture.

free cash flow

Commercial finance companies lend against the _______ of assets. v

liquidation value