Chapter 2—Preparing for the Entrepreneurial Journey
TRUE/FALSE
1. Entrepreneurship is a personal journey that begins in the mind of the nascent entrepreneur.
2. Entrepreneurs start businesses for many reasons, but the number one reason appears to be their need
for independence and to create something new.
3. The chances of success for a new business startup are determined primarily by the size of the initial
financial investment.
4. In an entrepreneurial endeavor, risk is correlated with reward; that is, the greater the risk taken, the
greater the reward expected.
5. Research has determined that effective and efficient business planning correlates with business
success.
6. It’s been proven that entrepreneurs start businesses solely to make money.
7. When capital markets make it difficult to find funding, entrepreneurs are less likely to start new
ventures from scratch.
8. Today many enterprising people are turning to nonprofit ventures to realize their entrepreneurial
dreams.
9. Without the support of corporate senior management, it will be difficult to move any entrepreneurial
project forward fast enough and far enough to be successful.
10. One of the biggest problems that scientists and engineers face when they decide to consider
entrepreneurship is the expectation that there should be formulas and straightforward “right or wrong”
answers.
MULTIPLE CHOICE
1. Research has confirmed that entrepreneurs are motivated intrinsically by such things as the desire for
____.
a.
wealth
b.
independence
c.
growth
d.
power
e.
partnership
2. When it comes to the Inc. 500 Fastest Growing Private Companies, the ____ is not a predictor of
ultimate success.
a.
size of the team
b.
size of the market
c.
amount of startup capital
d.
degree of risk
e.
desire for independence
3. Most of the great businesses that have been successful for at least 50 years (companies such as Walt
Disney, Sony, and Merck) did not start with a/an ____.
a.
lot of money
b.
need for independence
c.
great idea
d.
great team
e.
original idea
4. The goal of most entrepreneurs is to reduce the level of ____ in any venture.
a.
investment
b.
independence
c.
planning
d.
risk
e.
resources
5. In general, venture capitalists say that they will take a ____ and a large market opportunity in a
fast-growing area over a great idea any day
a.
big risk
b.
strong business plan
c.
passionate entrepreneur
d.
strong leader
e.
great team
6. The 2008 Global Entrepreneurship Monitor Report found that men and women in the ____ age
bracket are responsible for 36 percent of all the entrepreneurial activity in the United States and for 22
percent of the activity globally.
a.
25-45
b.
25-55
c.
45-65
d.
45-98
e.
65-98
7. Peter Drucker asserted, “The entrepreneurial mystique, it’s not magic, it’s not mysterious, and it has
nothing to do with the genes. It is ____.”
a.
having enough money
b.
a great idea
c.
a great network
d.
discipline
e.
the need for independence
8. In the United States, ____ entrepreneurship is most prevalent.
a.
opportunity-driven
b.
efficiency-driven
c.
factor-driven
d.
necessity-driven
e.
passion-driven
9. ____ comprise over two-thirds of all sole proprietorships, partnerships, and S-corporations in the
United States.
a.
Startups
b.
Home-based businesses
c.
Nonprofit businesses
d.
Serial entrepreneurs
e.
Corporate entrepreneurs
10. An entrepreneur who owns a minority or majority stake in several ventures is called a ____
entrepreneur.
a.
portfolio
b.
traditional
c.
serial
d.
nonprofit
e.
None of these choices
11. An entrepreneur who starts one business and then moves on to start another is classified as a ____
entrepreneur.
a.
portfolio
b.
traditional
c.
serial
d.
nonprofit
e.
None of these choices
12. Nourish International, a nonprofit run by ____, raises money to help eradicate global poverty.
a.
small business owners
b.
students
c.
Microsoft
d.
college professors
e.
None of these choices
13. Robert Chambers used the ____ organizational structure as a vehicle to help low-income people make
better purchasing decisions when it came to cars.
a.
new venture
b.
socially responsible
c.
startup
d.
corporate
e.
nonprofit
14. Entrepreneurial-like ventures inside large companies are called ____.
a.
skunk works
b.
nonprofits
c.
for-profits
d.
corporate ventures
e.
None of these choices
15. ____ refers to an autonomous group with a mandate to find and develop new products for the company
that may even be external to the company’s core competencies.
a.
Skunk works
b.
Nonprofit
c.
Intrapreneurship
d.
Corporate venture
e.
None of these choices
16. A very specific task that an entrepreneur can undertake to prepare for success is to find/be a ____.
a.
network
b.
mentor
c.
self-starter
d.
leader
e.
All of these choices
17. The probability of survival and success tends to go up with businesses that have more ____.
a.
networks
b.
mentors
c.
competitors
d.
investors
e.
potential
18. ____ is the exchange of information and resources among individuals, groups, or organizations whose
common goals are to mutually benefit and create value for the members.
a.
Business planning
b.
Marketing
c.
Mentoring
d.
Networking
e.
None of these choices
19. The ____ in a professional network are the entrepreneur’s acquaintances and business contacts.
a.
strong ties
b.
weak ties
c.
work ties
d.
partners
e.
mentors
20. Entrepreneurs rely on their ____ for objective advice.
a.
strong ties
b.
weak ties
c.
work ties
d.
partners
e.
mentors
21. ____ serve as gateways to other networks, exerting influence between groups or networks rather than
within groups.
a.
Network brokers
b.
Angel investors
c.
Gateways
d.
Opinion leaders
e.
All of these choices
22. Which of the following is not a barrier to becoming self-employed?
a.
Lack of confidence
b.
Financial needs
c.
Family issues
d.
Time constraints
e.
Lack of training
23. ____ is a critical part of the everyday life of an entrepreneur and is a skill that must be developed and
exercised carefully.
a.
Making effective decisions
b.
Paying attention to details
c.
Comparing potential outcomes
d.
Critical thinking
e.
Being a micromanager
24. ____ facilitates a new venture’s identity and legitimacy as well as creates a competitive advantage that
is difficult to replicate.
a.
Networking
b.
Decision making
c.
Storytelling
d.
Critical thinking
e.
Micromanaging
25. Critical entrepreneurial skills include ____.
a.
opportunity recognition
b.
leadership and people management
c.
written and oral communication
d.
“leadership and people management” and “written and oral communication” only
e.
All of these choices
26. Entrepreneurial leaders have a distinct advantage over ____ leaders because they see themselves as
part of a team.
a.
heroic
b.
charismatic
c.
visionary
d.
both “heroic” and “charismatic”
e.
both “charismatic” and “visionary”
27. One of the best ways to discover an opportunity is to study a/an ____ in depth.
a.
company
b.
product
c.
industry
d.
leader
e.
None of these choices
28. Companies engage in skunk works, ____ and ____ to simulate an entrepreneurial environment within
the organization.
a.
brainstorming / intrepreneurship
b.
re-engineering / research
c.
networking / team building
d.
intrapreneurship / acquisition
e.
strategic alliances / acquisition
29. An entrepreneur’s ____ are the foundation for the business and are always reflected in the business and
in the way customers are treated.
a.
ideas
b.
networks
c.
core values
d.
resources
e.
relationships
30. A/An ____ is a group of companies that are engaged in similar or related activities.
a.
network
b.
industry
c.
foreign market
d.
both “network” and “industry”
e.
None of these choices
SHORT ANSWER
1. Why have myths developed about entrepreneurs?
2. Discuss the home-based entrepreneur.
3. What is required for an entrepreneurial mindset to succeed inside a large corporation?
4. Discuss some of the challenges in following the entrepreneur career path.
ANS:
5. What are the steps to increasing success as an entrepreneur?
6. What are some sources of business knowledge for entrepreneurs? Which is the most important?
7. How can an entrepreneur efficiently build a large, but meaningful network?
8. In what ways do entrepreneurial leaders have an advantage over heroic leaders?
9. Discuss the importance of making effective decisions.
10. Why should someone who is considering starting a business be concerned about her or his health?
ANS:
