Angel investors have a longer investment horizon than venture capitalists do.
Financial ratios are control mechanisms to test the financial strengths of a new venture.
For the Internet start-up, capital budgeting and operating expenses will tend to be
consumed by equipment purchasing or leasing, inventory, and advertising expenses.
The effectuation process starts with what one has and selects among possible outcomes.
One benefit of having a registered trademark is that it establishes the right to deposit
registration with customs to prevent importation of goods with a similar mark.
A board of advisors has less decision making authority than a board of directors does.
The business plan addresses only short term decision making.
Three major types of political risks that might be present are operating risk, transfer
risk, and ownership risk.
The most popular means of obtaining capital is from friends and family.
An organization that wants to become more entrepreneurial must learn to be more
productive with fewer resources.
Small Business Innovation Research grants are funded by federal agencies which
provide a portion of their R&D funds to small businesses.
In 2012 online retail sales increased by 15% over sales in 2011.
Many entrepreneurs find that as they grow they need to change their management style.
To file for trademark protection only intent to use is necessary.
Competition within an industry always has a negative effect on industry growth.
The three main advantages of going public are obtaining new capital, realizing an
enhanced valuation, and enhancing the company’s ability to obtain future funds.
Focus groups consist of 15 to 25 participants who are asked specific objective
functions.
The focus group is an excellent method for initially screening ideas and concepts.
Private data sources, such as Information Resources, Inc. and Nielsen Indexes, are a
low-cost secondary data source.
Attribute listing is an idea-finding technique that requires the entrepreneur to list the
attributes of an item or problem and then look at each from a variety of viewpoints.
Middlemen such as wholesalers have lower distribution costs because they operate with
economies of scale.
Chapter 7 is the most severe alternative in bankruptcy.
The hiring process is one area of business operation that the entrepreneur should not cut
back on to save time.
Business angels are members of a professionally managed group of wealthy individuals
who efficiently distribute risk capital.
Forced relationships is a method of forcing confrontations in focus groups.
Microsoft Excel is a software package that includes manufacturing, order entry, and
billing functions and it is usually too expensive for start-up firms.
Equity financing requires collateral.
To improve the chances of being approved for a bank loan, the entrepreneur should
prepare a “mini” business plan for the loan committee.
Elon Musk is also called as the Iron Man Entrepreneur.
The introductory page of the business plan should contain the amount of financing
needed.
The underwriter is of critical importance in establishing the initial price for the stock of
the company.
The organizational plan section of the business plan should describe the venture’s form
of ownership.
Typically business plan projections are made in a 36-month schedule.
An assessment of external uncontrollable variables that may impact the business plan is
known as:
A.an environmental analysis.
B.a description of the venture.
C.a trend analysis.
D.an executive summary.
The period of time when the environment is favorable for entrepreneurs to exploit a
particular new entry is the:
A.market research phase.
B.window of opportunity.
C.technology window.
D.narrow-scope strategy.
The factor approach:
A.uses the net tangible asset value in valuation.
B.is used only for insurance purposes.
C.uses earnings, dividend capacity, and book value.
D.assesses the comparable publicly held companies to determine the company’s worth.
Technological knowledge:
A.is gained through market research.
B.can lead to a new product that is the basis for a new entry.
C.does not help unless the market applicability is obvious.
D.does not help if the market is limited.
Which government office is responsible for the federal registration of trademarks?
A.U.S. Trademark Services
B.Local Chambers of Commerce
C.Patent and Trademark Office
D.Internal Revenue Service
The __________ strategy focuses on selling the firm’s existing products to new groups
of customers.
A.penetration
B.market development
C.product development
D.diversification
Which type of risk-capital market is available as a funding source only for
high-potential ventures?
A.Informal risk capital market
B.Private venture capital companies
C.Small business investment companies
D.Public equity market
Trade secrets can be protected for:
A.an unlimited period of time.
B.20 years according to federal law.
C.14 years according to state law.
D.50 years if renewed to the maximum allowed, five 10 year renewable terms.
Technological uncertainty:
A.is a result of uncertainty about customer demand.
B.occurs because an alternative technology could be introduced by competitors.
C.only occurs in emerging markets.
D.can be avoided by early entrants with superior technology.
Patents filed with the U.S. Patent Office:
A.are not disclosed to the public.
B.are the property of the U.S. Government.
C.frequently suggest other new products.
D.are only accessible to public limited companies.
Reverse brainstorming is much like brainstorming except that:
A.criticism is not allowed.
B.the technique is based on finding solutions.
C.the group need not be careful to maintain good morale.
D.the process usually involves identification of everything wrong with an idea.
The _____ patent is granted for a 14-year term.
A.utility
B.design
C.plant
D.procedure
Corporate entrepreneurship is best described as:
A.the hiring of former Entrepreneurs.
B.entrepreneurial action within an organization.
C.the process of buying acquiring entrepreneurial firms.
D.the process of hiring consultants to teach a firm how to be more creative.
The entrepreneurial attributes of persistence and determination, which are so beneficial
when the new venture is on the “right course,”
A.can make the entrepreneur more suitable to work in volatile markets.
B.can hasten the process of adapting to sudden changes.
C.can aid the entrepreneur in recognizing, and implementing changes.
D.can inhibit the ability of the entrepreneur to detect, and implement, change.
Brainstorming groups should:
A.contain an expert in the field to be discussed.
B.be serious and work-oriented.
C.try to generate as many ideas as possible.
D.encourage criticism of ideas from other participants in the group.
In limited partnerships:
A.the liability for any loss incurred is borne by the company.
B.the sponsoring company acts as the general partner.
C.there is no special tax benefit for partners.
D.the sponsoring company does not retain rights to use any base technology to develop
other products.
The person who purchases the franchise is the:
A.business architect.
B.franchisor.
C.franchisee.
D.franchise.
Joint ventures are sometimes called:
A.mergers.
B.strategic alliances.
C.acquisition.
D.leveraged buyout.
Which of the following statements is not true?
A.Religion in a culture defines the ideas for life, reflected in the values and attitudes of
individuals and the overall society.
B.The tenets of nonreligious or secularist societies do not affect behavior.
C.The impact of religion varies depending on the strength of the dominant religious
tenets and their impact on the values and attitudes of the culture.
D.Religion provides the basis for some degree of transcultural similarity under shared
beliefs and attitude.
A disadvantage of being a first mover is:
A.environmental instability.
B.cost disadvantages.
C.long lead time to gain knowledge.
D.a limited market.
Which is the best way to gain knowledge about a potential new entry?
A.Marketing research
B.Internet research
C.Entrepreneur’s market experience and knowledge.
D.Surveys
Which U.S. Census publication gives statistics such as industry outputs, inputs, and
operating data on manufacturing activity, by industry groups?
A.Service Annual Survey
B.Current Industrial Report
C.County Business Patterns
D.Annual Survey of Manufacturers
With the enactment of the Sarbanes-Oxley Act in 2002:
A.the expense and administrative responsibilities of being a public company are
significantly lower.
B.corporate governance and disclosure requirements of public companies is subject to
greater regulation.
C.the liability risks of officers and directors less stringent.
D.the recruitment of qualified independent directors is simpler.
The _________ imposes oversight responsibilities on members of the board of
directors.
A.Social Security Act
B.Fair Labor Practices Act
C.Taft-Hartley Act
D.Sarbanes-Oxley
In business-to-business which advertising and promotion method would be the least
likely to be used?
A.Trade magazines
B.Direct sales
C.Trade shows
D.TV ads
The section of the business plan in which the entrepreneur identifies changes occurring
on the national and international level is the:
A.merchandising plan.
B.description of the venture.
C.executive summary.
D.environmental and industry analysis.
Joint ventures can involve a wide variety which include:
A.universities.
B.not-for-profit organizations.
C.traditional businesses.
D.all of these.
The Small Business 7(a) Guaranty program:
A.guarantees up to 50 percent of the amount loaned.
B.helps qualified small businesses obtain financing when they cannot obtain it through
regular lending channels.
C.has a maximum loan amount of $10 million.
D.loans can be used only for machinery and equipment, and land and building.
As the business grows:
A.selling expenses should go down.
B.salaries and wages will go up as output increases.
C.the pro forma income statement becomes unimportant.
D.advertising expenses should go down.
Chapter 11 is the type of bankruptcy that results in:
A.extended time payments.
B.liquidation.
C.reorganization.
D.turn around time.
Which survey method is the fastest method for obtaining data?
A.Telephone
B.Mail
C.Personal
D.Internet
All owners of ____ or more are required to personally guarantee an SBA loan.
A.20%
B.30%
C.35%
D.40%
The least liquid current asset, _____, is eliminated when calculating the acid test ratio.
A.cash
B.accounts receivable
C.inventory
D.land
________ is the amount owners have invested and/or retained from the venture
operations:
A.Cash flow
B.Retained earnings
C.Profit
D.Owner’s equity