Entrepreneurial Finance Review
Questions
Course Introduction
Entrepreneurial Finance explores the financial strategies and tools essential for launching and growing new ventures. This course examines the unique challenges entrepreneurs face when acquiring and managing capital, including bootstrapping, angel investing, venture capital, crowdfunding, and private equity. Students will learn to evaluate business opportunities, develop financial models, assess risk and returns, and understand the investors perspective. Through real-world case studies and hands-on exercises, students gain practical experience in valuing startups, negotiating investment terms, and making informed financial decisions crucial to entrepreneurial success.
Recommended Textbook Entrepreneurship The Practice and Mindset 1st Edition by Heidi M. Neck
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18 Chapters
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1697 Flashcards
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Chapter 1: Entrepreneurship: a Global Social Movement
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Sample Questions
Q1) The gap of venture capital available for men as compared to women is 5 to 15% women to 85 to 95% men. The evidence from the 2014 Diana Project ______.
A)suggests that it is not the women entrepreneurs who need to adapt, but the venture capital model needs to be re-evaluated and updated to keep up with the changing landscape of women's entrepreneurship
B)suggests that women-owned businesses are more risky than men-owned businesses
C)indicates that the men are more interested in developing highly industrialized business while women are more interested in the social/selling business models
D)supports the theory that a business really does not need a large amount of capital to be successful.
Answer: A
Q2) Entrepreneurs are not extreme risk-takers ______.
A)is not a true statement because the nature of starting something new, a business, is risky
B)is true because risk can be offset by planning and research
C)is a true statement because new businesses have a high rate of failure
D)because entrepreneurship has nothing to do with risk
Answer: B
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Page 3
Chapter 2: Practicing Entrepreneurship
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Sample Questions
Q1) The Creation Approach in Action Figure 2.1 indicates ______.
A)that the creation approach can help you develop an Indian restaurant
B)that the creation approach can help your restaurant concept move into other food services such as lunch delivery
C)that the creation approach can help you imagine many avenues including a cookbook, teaching classes, developing food-themed tours, and doing a cooking show in addition to your original thought of a Indian restaurant
D)the creation approach will lead you into areas that will fail
Answer: C
Q2) Lonnie is an entrepreneur who embraces the method approach.He ______.
A)has a set of practices, is creative, invests in learning, and has a collaborative style
B)is predictive, focuses on planning, wants an expected return, and is competitive
C)has predicted outputs, is creative, likes to plan, and collaborates
D)is creative and predictive
Answer: A
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4
Chapter 3: Developing an Entrepreneurial Mindset
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Sample Questions
Q1) Luther is known at word for being direct, detailed oriented, and very linear while focused on processes.He likes step a completed before step b, step c, and so on.Luther is
A)left-brain thinking
B)a self-leader
C)right-brain thinking
D)self-rewarding
Answer: A
Q2) Maci learned that the entrepreneurial mindset requires the habits of self-leadership, creativity, and improvisation.The ______ is the pathway to action.
A)entrepreneur
B)mindset
C)idea
D)movement
Answer: B
Q3) Define the components of the self-leadership habit.
Answer: process of influencing and controlling own behavior, actions and thinking; includes ability for self-direction, self-motivation
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5
Chapter 4: Supporting Social Entrepreneurship
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Sample Questions
Q1) Paisley is a social innovator and needs social investors.She really needs a source of how-to information from writing business plans to measuring social impacts.She should seriously consider which of the following associations?
A)Investor's Circle
B)Lewis Institute
C)Net Impact
D)Root Cause
Q2) Describe the features of venture philanthropy.
Q3) The organic clothing company, PACT, designs, manufactures, and distributes premium cotton underwear without using pesticides, fertilizers, or chemicals.PACT is an example of ______
A)an NGO
B)a social purpose venture
C)a profit-motivated organization
D)a traditional entrepreneurship
Q4) Describe venture philanthropy funding.
Q5) Compare and contrast the high-engagement and multiyear support characteristics of venture philanthropists.
Q6) Using the typology of ventures, list and describe the four types of ventures.
Page 6
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Chapter 5: Generating New Ideas
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Sample Questions
Q1) Jack McCarthy found an online market for ______.
A)gluten-free snack bars
B)red wiggler worms
C)unassembled plant carts
D)ugly Christmas sweaters
Q2) ______ strategies are techniques which help to break our minds out of mental fixedness in order to bring about creative insights.
A)Mental
B)Creative insights
C)Mental fixedness
D)Habit-breaking
Q3) Kurt likes to break his mind out of mental fixedness in order to bring about creative insights.He is using which strategy?
A)analytical strategy
B)search strategy
C)imagination-based strategy
D)habit-breaking strategy
Q4) Describe habit-breaking strategies techniques for idea generation and how you would use it as a technique for your employer or business venture.
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Chapter 6: Using Design Thinking
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102 Flashcards
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Sample Questions
Q1) Under the dimensions of observation, what is meant by space?
A)the amount of time it takes for a consumer to complete a task
B)the physical things that are present at the time the task is performed
C)the physical place or places in which the behavior is performed
D)the emotions felt and repressed
Q2) You are interviewing someone about a new concept in debit cards.The interviewee immediately tells you that he hates debit cards and never uses them.What would be the appropriate next step?
A)Terminate the interview as this person will not give you knowledgeable information.
B)Ask him about the new debit card concept anyway.
C)Explore why he hates debit cards.
D)Ask about a similar product, but not the debit card.
Q3) After an interview, it is a good idea to write down additional observations and insights from body language and tone of voice.
A)True
B)False
Q4) Describe what is done during a peel-the-onion process.Explain why the process is used.
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Page 8
Chapter 7: Testing and Experimenting in Markets
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Sample Questions
Q1) In Rent the Runway's second experiment, what was the added information the company gained about its potential service?
A)People would rent the clothing even if they were not able to try the clothing on first.
B)People would not rent clothing that they could not try on.
C)People were not interested in renting clothes that were not officially designer clothing.
D)It determined the size of the market by seeing what percentage of women would prefer to rent online.
Q2) Antoinette wants to test her new vegetarian burger and test the hypothesis that people will not be able to tell it is not beef.She tests her product at a local big box store and hands samples out, telling people that it is a new hamburger product.She then asks them to fill out a questionnaire about the product.Discuss how this experiment is or is not being conducted in an ethical manner.
Q3) A prototype is often created before a pilot test is conducted.
A)True
B)False
Q4) Describe why storyboarding is an effective form of experimentation.
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Page 9
Chapter 8: Building Business Models
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Sample Questions
Q1) The business model of an entrepreneur must be flexible in order to respond to new information.
A)True
B)False
Q2) What need inspired Meridith Perry, founder and CEO of uBeam?
A)the inconvenience of using a power cord to charge her laptop and smartphone
B)a need to apply her knowledge about soundwaves
C)She was asked to develop a different source of energy for a leading computer company.
D)She felt that if she built a new way of powering devices, she could fund her startup.
Q3) Why would Rocket Internet raise questions of ethics?
A)They are taking someone else's business model and placing it elsewhere.
B)They are producing the same service at a lower cost.
C)They are offering the service to an underserved market.
D)They are selling their companies back to the company they are cloning.
Q4) Explain why a shopping center is an example of a multisided market.
Q5) Consider the business models of Amazon.com.Describe two of its business models.
Q6) Consider the online store, Amazon.com.Describe some of the ways that the store's BMC achieves customer relationship.
Page 10
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Chapter 9: Planning for Entrepreneurs
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) What length does Guy Kawasaki recommend for a pitch deck?
A)five slides
B)seven slides
C)10 slides
D)15 slides
Q2) The distinction of a feasibility study is its ______.
A)formality
B)completeness
C)complexity
D)speed
Q3) Who is the primary audience of a business model canvas?
A)friends and family
B)team members and advisors
C)investors
D)banks and early funders
Q4) What is the difference between planning and a plan?
A)Planning is action oriented; plans are stable.
B)They are the same because plans are never final.
C)Planning answers questions; plans document the answers.
D)Planning is flexible; plans do not change.
Page 11
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Chapter 10: Creating Revenue Models
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Sample Questions
Q1) In this pricing strategy, the product is offered for a heavily discounted price (or free) to attract more customers:
A)introductory offer
B)loss-leader
C)customer-led
D)competition-led
Q2) A grocery store offers cans of vegetables at 10 for $10.This is most likely which of the following pricing strategies:
A)skimming
B)fair pricing
C)psychological pricing
D)customer-led pricing
Q3) Assume that you want to study the cost of goods sold for your business, a company that produces customer T-shirts for school sports teams.Discuss what should be considered in this study.
Q4) Taxes are the last expense item before net income.
A)True
B)False
Q5) Explain the advantages of bundled pricing and give an example.
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Chapter 11: Learning From Failure
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Sample Questions
Q1) What is described as a blame-free environment?
A)an entrepreneur who does not blame himself for failure
B)an environment where everyone in the business is comfortable admitting mistakes and learning from them
C)an environment where mistakes are regularly reviewed in a team environment
D)an environment where the entrepreneur admits his or her mistakes to employees
Q2) Mathew vents when his supervisor tells him that one of the engineers made a mistake in fulfilling the design.This action would be called which of the following?
A)justified anger
B)shooting the messenger
C)assigning blame
D)inappropriate communication
Q3) Informing people of what is and is not an acceptable mistake will help create a blame-free environment.
A)True
B)False
Q4) Entrepreneur Kurt Theobald suggests that entrepreneurs focus on others.Explain how this will help entrepreneurs learn from failure.
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Chapter 12: Bootstrapping for Resources
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Sample Questions
Q1) Which of the following is an advantage of bootstrapping and starting slowly?
A)The business will grow faster without interference from venture capitalists.
B)You are more likely to build a larger customer base due to a slower start.
C)You will not spend personal funds.
D)You will avoid risk.
Q2) What must be offered by someone who uses Kickstart for a fundraising project?
A)They must create something to share with contributors.
B)They must offer to return the exact amount of the contributed funds within a given period of time.
C)They must offer to give a portion of their funds to a charity.
D)They must offer to return the money if the person changes his or her mind.
Q3) In the patronage model, investors will contribute to your project with no expectation of direct return.
A)True
B)False
Q4) What made equity crowdfunding possible?
A)the success of other crowdfunding sites
B)the JOBS Act, signed by President Obama
C)changes in Dow Jones
D)advances in the software of crowdfunding sites
Page 14
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Chapter 13: Financing for Startups
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Sample Questions
Q1) Pre-money valuation is the post-money valuation minus the ______.
A)the value of the company at the end of 1 year
B)the value of the company at the end of 5 years
C)investment
D)cost of the obtaining the investment
Q2) Why would one consider waiting before seeking investment capital?
A)You maintain ownership of the company as long as possible.
B)You build value in the company, which allows you to get the best investment deal.
C)Investors will want to see that you invested your own money first.
D)Waiting gives you time to fully reflect on the company's potential.
Q3) When valuation considers value add, what is being talked about?
A)the value of the financial investment
B)the post-money valuation
C)the value of the investor's advice and guidance
D)the value from other sources of investment
Q4) Seed-stage financing consists of small amounts of capital to help entrepreneurs prove a concept.
A)True
B)False
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Chapter 14: Developing Networks
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Sample Questions
Q1) Janice asks her grandmother to help her out in her day care center while one of her employees is out on vacation.What is the nature of the social capital used in this action?
A)bond
B)bridge
C)linkage
D)generational
Q2) Which of the following would represent a successful networking venture?
A)a large stack of business cards and business contact information
B)a good conversation with someone in which you exchanged information
C)a good conversation that resulted in a sale
D)inclusion in the formal membership of the group
Q3) A self-selected stakeholder is characterized by which of the following?
A)He or she is willing to fund the company or purchase stock.
B)He or she has asked for a personal pitching session to see if your idea can be embraced.
C)He or she feels motivated to help you gain access to information and resources that you currently do not have.
D)He or she has some potential gain or loss in your company.
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Chapter 15: Navigating Legal and Ip Issues
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Sample Questions
Q1) Which of the following conditions is applicable to all 501(c)(3) organizations?
A)they must be classified as a church, educational, or charitable institution
B)their earnings should be used to benefit the shareholders
C)profit must be reinvested and used for the organization's exempt purpose
D)shareholder earnings are limited by the tax code
Q2) Companies with less than 10 employees are not required to post federal and state notices informing employees of their rights under labor laws.
A)True
B)False
Q3) What significant change is taking place in China that may help reduce IP theft?
A)China has signed international agreements with the World Trade Center.
B)More people in China are applying for patents to protect their own inventions.
C)China is changing the labeling on all products exported from China.
D)China is growing its economic base.
Q4) Which of the following best describes a patent troll?
A)an agency constantly looking for unprotected products
B)an agency that is dedicated to finding piracy and counterfeit products
C)an agency that owns a patent but has never produced the product
D)an agency that files suit for a patent violation
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Chapter 16: Marketing and Pitching Your Idea
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Sample Questions
Q1) When marketers use the S.A.V.E.approach, the focus is switched from price to which of the following?
A)access
B)solution
C)value
D)education
Q2) What percentage of communication is achieved through actual words?
A)7%
B)20%
C)36%
D)44%
Q3) Why is it important to explain the marketing mix before starting a company?
A)It will help in pitching the product.
B)It will prevent loss of time and money marketing to the wrong target group.
C)It will crystalize the offering and determine how the product or service will be taken to the market.
D)It will help categorize the service for formal Internet and print advertising media.
Q4) Discuss what should be considered when setting the price for your product.
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18
Chapter 17: Financial Statements and Projections for Startups
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Sample Questions
Q1) The balance sheet shows ______.
A)what the business owns and what the business owes
B)only net worth
C)current expenses
D)shareholder deferred revenue
Q2) The financial statement that subtracts cost of goods sold from revenue to arrive at gross profit is is a(n) ______.
A)balance sheet
B)cash flow statement
C)entrepreneurs scorecard
D)income statement
Q3) Operating expenses include which of the following?
A)cost of goods sold
B)liabilities, deferred expenses, and assets
C)sales expense and administrative and general expenses
D)amortization and interest expense
Q4) Provide the line by line format of an income statement.
Q5) Compare and contrast the Income Statement and the Statement of Cash Flows.
Q7) List five examples of cash outflows. Page 19
Q6) Describe how you calculate CCC, Cash Conversion Cycle.
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Page 20
Chapter 18: the Pitch Deck
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Sample Questions
Q1) Sasha, in developing her pitch deck, stated her idea.She:
A)articulated the purpose of the venture
B)identified those served by the idea
C)identified the resources required
D)described the team
Q2) Paisley wants to add to her pitch deck information about her customers and details about the number of potential customers available in her market.She should include this information in her pitch deck.
A)True
B)False
Q3) You are the entrepreneur and have just finished an important pitch deck presentation.You are asked, "What mistakes have you made thus far in this business, and what have you learned?" How do you answer?
Q4) Luther has done a lot of work getting his venture off the ground, and he wants to tell people what has been accomplished already.This is called:
A)blowing your own horn
B)an accomplishment statement
C)a completed project report
D)traction
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