Question 1

Bootstrapping and starting slowly enables entrepreneurs to avoid any and all risk.

Accepted Answer

A) True 
 B)False

Question 2

If you choose the right bootstrapping strategy,you can likely avoid having to invest sweat equity.

Accepted Answer

A) True 
 B)False

Question 3

What is characteristic of the reward model of crowdfunders?

Accepted Answer

A)  Investors provide financial support with no expectation of direct return.
B)  Investors are given prizes for their financial support,such as product samples or experiences.
C)  Equity is exchanged for the contribution.
D)  Funds are treated as loans.

Question 4

Wikihouse freely provides user-submitted blueprints for anyone who wishes to build an affordable custom-built house with 3D printing.This is an example of ______ because ______.

Accepted Answer

A)  crowdsourcing; it uses the expertise of the crowd to greatly reduce the cost of design and construction
B)  crowdfunding; it uses the Internet to quickly generate a large user base for Wikihouse
C)  bootstrapping; it allows amateur designers an opportunity to disrupt the construction business
D)  Wikifunding; it uses the open-source Wikipedia platform to generate new solutions and opportunities

Question 5

Crowdfunding backers invest solely on the merits of a product rather than their impression of the entrepreneur involved with the product.

Accepted Answer

A) True 
 B)False

Question 6

Seth starts his company with computers that he found on craigslist.com and some office furniture from the basement of his parents' home.This strategy would be considered which of the following?

Accepted Answer

A)  startup
B)  sweat equity
C)  penny pinching
D)  zero-based funding

Question 7

Wikipedia encouraging its users to edit and update its free online encyclopedia is an example of ______.

Accepted Answer

A)  patronage
B)  equity
C)  crowdfunding
D)  crowdsourcing

Question 8

Which of the following could not be offered in a Kickstarter campaign?

Accepted Answer

A)  a free product or product sample
B)  participation in a cash award raffle
C)  presale delivery of the product or service
D)  free tickets to a play

Question 9

When someone states,"I don't have money to start a business," what fact might you tell them to consider?

Accepted Answer

A)  Most businesses start without any formal investment.
B)  This is a valid reason for not starting a business.
C)  Formal investment will be needed to make a successful company.
D)  People who have no money cannot start a business.

Question 10

Jose is opening a small restaurant.On weekends,he works with his cousin to construct the tables,chairs,and counters that will go into the restaurant.What is the name given to the result of these efforts?

Accepted Answer

A)  labor equity
B)  owner labor
C)  sweat equity
D)  family ownership

Question 11

Research has shown that the majority of crowdfunded projects are delivered later than expected.

Accepted Answer

A) True 
 B)False

Question 12

Imagine that you have developed a software application and want to raise money for legal advice,filing initial business and regulatory forms,and funding your travel and marketing expenses.Describe how you would fund these early efforts.

Accepted Answer

The answer should first exhaust traditio...

Question 13

If you have a successfully crowdfunded product and you know you are going to miss your advertised ship date,what should you do?

Accepted Answer

A)  Do nothing.
B)  Change the date on your crowdfunding site but do not draw attention to it.
C)  Be honest; alert your backers and notify others through the crowdfunding site.
D)  Shift the blame to someone else (manufacturers,distributors,suppliers,etc.) .

Question 14

Compare the investor model of crowdfunding with the lending model.What are the advantages and disadvantages of each for the entrepreneur?

Accepted Answer

The amount contributed will be considere...

Question 15

How does equity crowdfunding differ from other types of crowdfunding?

Accepted Answer

A)  Investors are given the opportunity to become company shareholders.
B)  Funds are raised from a community of angel and venture capitalists.
C)  Funds are provided by the government.
D)  Financial institutions are allowed to raise funds on these sites.

Question 16

Hard work an entrepreneur personally puts in to get a business up and running is known as ______.

Accepted Answer

A)  penny pinching
B)  bootstrapping
C)  sweat equity
D)  affordable loss

Question 17

Which of the following accurately describes a major advantage to crowdfunding?

Accepted Answer

A)  Projects are easy to conduct.
B)  There are different options in getting funded,aside from giving a part of the company away.
C)  It is relatively risk free.
D)  It is the easiest way to get worldwide recognition.

Question 18

In reference to crowdfunding,a backer is best described as ______.

Accepted Answer

A)  a person who will pay back a loan if you fail to do so
B)  a person who contributes support in a crowdfunding venture
C)  a financial institution that lends money to a startup
D)  the financial institution that manages the transfer of money

Question 19

What happens on Kickstarter if the funds are not raised in the given amount of time?

Accepted Answer

A)  The project is automatically extended for another 30 days.
B)  The project owner can keep the money raised up to the end of the period.
C)  The project owner can transfer funds earned to a project of his or her choice.
D)  The money is not earned and no money will be received.

Question 20

Using the Internet to attract,aggregate,and manage ostensibly inexpensive or even free labor from enthusiastic customers and like-minded people is called ______.

Accepted Answer

A)  crowdfunding
B)  penny pinching
C)  crowdsourcing
D)  bootstrapping

Exam 12: Bootstrapping and Crowdfunding for Resources

Jose is opening a small restaurant.On weekends,he works with his cousin to construct the tables,chairs,and counters that will go into the restaurant.What is the name given to the result of these efforts?

Correct AnswerverifiedShow Answer

How does equity crowdfunding differ from other types of crowdfunding?

Correct AnswerverifiedShow Answer

If you have a successfully crowdfunded product and you know you are going to miss your advertised ship date,what should you do?

Correct AnswerverifiedShow Answer

Using the Internet to attract,aggregate,and manage ostensibly inexpensive or even free labor from enthusiastic customers and like-minded people is called ______.

Correct AnswerverifiedShow Answer

Crowdfunding backers invest solely on the merits of a product rather than their impression of the entrepreneur involved with the product.

Correct AnswerverifiedShow Answer

What is characteristic of the reward model of crowdfunders?

Correct AnswerverifiedShow Answer

Which of the following could not be offered in a Kickstarter campaign?

Correct AnswerverifiedShow Answer

When someone states,"I don't have money to start a business," what fact might you tell them to consider?

Correct AnswerverifiedShow Answer

Wikihouse freely provides user-submitted blueprints for anyone who wishes to build an affordable custom-built house with 3D printing.This is an example of ______ because ______.

Correct AnswerverifiedShow Answer

What happens on Kickstarter if the funds are not raised in the given amount of time?

Correct AnswerverifiedShow Answer

Research has shown that the majority of crowdfunded projects are delivered later than expected.

Correct AnswerverifiedShow Answer

Bootstrapping and starting slowly enables entrepreneurs to avoid any and all risk.

Correct AnswerverifiedShow Answer

Compare the investor model of crowdfunding with the lending model.What are the advantages and disadvantages of each for the entrepreneur?

Correct AnswerverifiedThe amount contributed will be considere...View AnswerShow Answer

Which of the following accurately describes a major advantage to crowdfunding?

Correct AnswerverifiedShow Answer

In reference to crowdfunding,a backer is best described as ______.

Correct AnswerverifiedShow Answer

Imagine that you have developed a software application and want to raise money for legal advice,filing initial business and regulatory forms,and funding your travel and marketing expenses.Describe how you would fund these early efforts.

Correct AnswerverifiedThe answer should first exhaust traditio...View AnswerShow Answer

Wikipedia encouraging its users to edit and update its free online encyclopedia is an example of ______.

Correct AnswerverifiedShow Answer

Hard work an entrepreneur personally puts in to get a business up and running is known as ______.

Correct AnswerverifiedShow Answer

Seth starts his company with computers that he found on craigslist.com and some office furniture from the basement of his parents' home.This strategy would be considered which of the following?

Correct AnswerverifiedShow Answer

If you choose the right bootstrapping strategy,you can likely avoid having to invest sweat equity.

Correct AnswerverifiedShow Answer

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Wikihouse freely provides user-submitted blueprints for anyone who wishes to build an affordable custom-built house with 3D printing.This is an example of because .

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The amount contributed will be considere...
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The answer should first exhaust traditio...
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