Question 1

In 2015, venture capital firms funded nearly ________ deals.

Accepted Answer

A)   800
B)   2,600
C)   3,700
D)   6,200
E)   8,000

Question 2

Which of the following statements is incorrect regarding equity funding?

Accepted Answer

A)   Equity investors expect to get their money back, along with a substantial capital gain, through the sale of their stock.
B)   Angel investors are a common source of equity funding.
C)   Equity funding is not a loan.
D)   Equity investors are very demanding.
E)   Equity investors fund the majority of the plans they consider.

Question 3

Debt financing means exchanging partial ownership in a firm in exchange for cash.

Accepted Answer

A) True 
 B)False

Question 4

Equity financing (or funding)  means ________.

Accepted Answer

A)   exchanging partial ownership in a firm, usually in the form of stock, for funding
B)   getting a grant or outright gift
C)   getting a loan
D)   getting a lease
E)   getting a loan guarantee

Question 5

Which of the following statements is NOT correct regarding business angels?

Accepted Answer

A)   Business angels invest in more startups on a yearly basis than venture capitalists.
B)   The number of angel investors has decreased dramatically over the past decade.
C)   Business angels usually take a seat on the board of directors of the firms in which they invest.
D)   Business angels are valuable because of their willingness to make relatively small investments.
E)   Business angels are difficult to find.

Question 6

According to our textbook, the seed money that gets a company off the ground typically comes from ________.

Accepted Answer

A)   angel investors
B)   venture capitalists
C)   commercial banks
D)   governmental agencies
E)   the founders of the firm

Question 7

Equity investors typically have a ________ year investment horizon.

Accepted Answer

A)   1 to 3
B)   2 to 4
C)   3 to 5
D)   4 to 6
E)   5 to 7

Question 8

Kinvolved, the company profiled in the opening feature of Chapter 10, is an EdTech startup that involves an app to track student absences. The company was co-founded by Miriam Altman and Alexandra Meis. Which of the following is true about Kinvolved's founding story?

Accepted Answer

A)   Both Altman and Meis were college professors before starting the venture.
B)   The co-founders raised money via an Indiegogo crowdfunding campaign.
C)   Altman and Meis went public via an IPO soon after launch.
D)   Both Altman and Meis attended Stanford University.
E)   Altman and Meis met while they were teaching at Harvard University.

Question 9

________ are individuals who invest their personal capital directly in start-ups.

Accepted Answer

A)   Venture capitals
B)   Business angels
C)   Institutional investors
D)   Investment bankers
E)   Business capitalists

Question 10

A(n)  ________ bank is an institution, such as Credit Suisse First Boston, that acts as an underwriter or agent for a firm engaged in an initial public offering.

Accepted Answer

A)   venture
B)   statutory
C)   fiduciary
D)   investment
E)   public

Question 11

The number of angel investors in the United States has decreased dramatically over the past decade.

Accepted Answer

A) True 
 B)False

Question 12

What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

Accepted Answer

Equity funding means exchanging partial ...

Question 13

The most notable SBA program available to small businesses is the ________.

Accepted Answer

A)   SBA 1060 Guaranty
B)   Code 604 Guaranty Program
C)   7(
A)   Guaranty Program
D)   SBA 101 Program
E)   Small Business 401 Program

Question 14

Amy Clark just opened a soup and salad restaurant near Golden Gate Park in San Francisco, CA. Rather than borrow money or raise funds from investors, Amy used her creativity and ingenuity and figured out how to get her business up and running without the need for external funding. Amy is utilizing a technique referred to as ________.

Accepted Answer

A)   networking
B)   reaching
C)   scrounging
D)   prospecting
E)   bootstrapping

Question 15

The three primary reasons startups need funding are ________.

Accepted Answer

A)   cash flow challenges, capital investments, and lengthy product development cycles
B)   business research, cash flow challenges, and costs associated with building a brand
C)   bonuses for members of the new venture team, attorney fees, and lengthy product development cycles
D)   attorney fees, capital investments, and marketing research
E)   bonuses for members of the new venture team, marketing research, and personnel costs

Question 16

What is meant by the term "bootstrapping"? Provide several examples of the ways that entrepreneurs bootstrap to raise money or cut costs?

Accepted Answer

Bootstrapping is the use of creativity, ...

Question 17

The first sale of stock by a firm to the public is referred to as a(n)  ________.

Accepted Answer

A)   original public submission
B)   first unrestricted offering
C)   preemptive initial offering
D)   original open offering
E)   initial public offering

Question 18

What is an elevator speech? How did it get its name?

Accepted Answer

An elevator speech is a brief, carefully...

Question 19

Venture capitalists are individuals who invest their personal capital directly in startups.

Accepted Answer

A) True 
 B)False

Question 20

Courtney Young is the founder of a company in the semiconductor industry. Courtney's firm is still in the feasibility analysis stage and doesn't have a product that is ready to sell. The company is spending about $25,000 per month and expects to maintain that level of spending until it reaches profitability. The $25,000 a month is Courtney's ________ rate.

Accepted Answer

A)   consumption
B)   utilization
C)   burn
D)   usage
E)   liquidity

Exam 10: Getting Financing or Funding

In 2015, venture capital firms funded nearly ________ deals.

Correct Answer
verified

Equity financing (or funding) means ________.

Correct Answer
verified

________ are individuals who invest their personal capital directly in start-ups.

Correct Answer
verified

The first sale of stock by a firm to the public is referred to as a(n) ________.

Correct Answer
verified

What is an elevator speech? How did it get its name?

Correct Answer
verified
An elevator speech is a brief, carefully...
View Answer

Debt financing means exchanging partial ownership in a firm in exchange for cash.

Correct Answer
verified

According to our textbook, the seed money that gets a company off the ground typically comes from ________.

Correct Answer
verified

A(n) ________ bank is an institution, such as Credit Suisse First Boston, that acts as an underwriter or agent for a firm engaged in an initial public offering.

Correct Answer
verified

Equity investors typically have a ________ year investment horizon.

Correct Answer
verified

The number of angel investors in the United States has decreased dramatically over the past decade.

Correct Answer
verified

The most notable SBA program available to small businesses is the ________.

Correct Answer
verified

Correct Answer
verified

Which of the following statements is incorrect regarding equity funding?

Correct Answer
verified

Venture capitalists are individuals who invest their personal capital directly in startups.

Correct Answer
verified

Which of the following statements is NOT correct regarding business angels?

Correct Answer
verified

The three primary reasons startups need funding are ________.

Correct Answer
verified

What is meant by the term "bootstrapping"? Provide several examples of the ways that entrepreneurs bootstrap to raise money or cut costs?

Correct Answer
verified
Bootstrapping is the use of creativity, ...
View Answer

Correct Answer
verified

What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

Correct Answer
verified
Equity funding means exchanging partial ...
View Answer

Kinvolved, the company profiled in the opening feature of Chapter 10, is an EdTech startup that involves an app to track student absences. The company was co-founded by Miriam Altman and Alexandra Meis. Which of the following is true about Kinvolved's founding story?

Correct Answer
verified

Exam 10: Getting Financing or Funding

In 2015, venture capital firms funded nearly ________ deals.

Correct AnswerverifiedShow Answer

Equity financing (or funding) means ________.

Correct AnswerverifiedShow Answer

________ are individuals who invest their personal capital directly in start-ups.

Correct AnswerverifiedShow Answer

The first sale of stock by a firm to the public is referred to as a(n) ________.

Correct AnswerverifiedShow Answer

What is an elevator speech? How did it get its name?

Correct AnswerverifiedAn elevator speech is a brief, carefully...View AnswerShow Answer

Debt financing means exchanging partial ownership in a firm in exchange for cash.

Correct AnswerverifiedShow Answer

According to our textbook, the seed money that gets a company off the ground typically comes from ________.

Correct AnswerverifiedShow Answer

A(n) ________ bank is an institution, such as Credit Suisse First Boston, that acts as an underwriter or agent for a firm engaged in an initial public offering.

Correct AnswerverifiedShow Answer

Equity investors typically have a ________ year investment horizon.

Correct AnswerverifiedShow Answer

The number of angel investors in the United States has decreased dramatically over the past decade.

Correct AnswerverifiedShow Answer

The most notable SBA program available to small businesses is the ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect regarding equity funding?

Correct AnswerverifiedShow Answer

Venture capitalists are individuals who invest their personal capital directly in startups.

Correct AnswerverifiedShow Answer

Which of the following statements is NOT correct regarding business angels?

Correct AnswerverifiedShow Answer

The three primary reasons startups need funding are ________.

Correct AnswerverifiedShow Answer

What is meant by the term "bootstrapping"? Provide several examples of the ways that entrepreneurs bootstrap to raise money or cut costs?

Correct AnswerverifiedBootstrapping is the use of creativity, ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

Correct AnswerverifiedEquity funding means exchanging partial ...View AnswerShow Answer

Kinvolved, the company profiled in the opening feature of Chapter 10, is an EdTech startup that involves an app to track student absences. The company was co-founded by Miriam Altman and Alexandra Meis. Which of the following is true about Kinvolved's founding story?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
An elevator speech is a brief, carefully...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Bootstrapping is the use of creativity, ...
View Answer

Correct Answer
verified

Correct Answer
verified
Equity funding means exchanging partial ...
View Answer

Correct Answer
verified