Entrepreneurial Strategy Exam Review
Course Introduction
Entrepreneurial Strategy focuses on the development and implementation of effective strategies for launching and growing new business ventures. The course explores how entrepreneurs identify opportunities, assess market dynamics, create competitive advantages, and allocate resources under uncertainty. Key topics include business model innovation, strategic positioning, financing choices, risk management, and the navigation of competitive and regulatory environments. Through case studies, simulations, and project work, students gain practical skills for making strategic decisions and formulating action plans that drive entrepreneurial success.
Recommended Textbook
New Venture Creation Entrepreneurship for the 21st Century 9th Edition by Stephen Spinelli
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19 Chapters
689 Verified Questions
689 Flashcards
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Page 2
Chapter 1: The Global Entrepreneurial Revolution for a Flatter World
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26 Verified Questions
26 Flashcards
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Sample Questions
Q1) Research in the 1980s and 1990s found that since World War II,small entrepreneurial firms have been responsible for half of all innovation and 95 percent of all radical innovation in the United States.
A)True
B)False
Answer: True
Q2) When successful entrepreneurs get involved with non-profits directly by offering strategic assistance (like long-term planning,board and executive recruitment,coaching,and leveraging relationships to identify additional resources and facilitate partnerships),this is referred to as ________ philanthropy.
Answer: high engagement
Q3) Which of the following is not a characteristic of new venture creation?
A) Fosters job creation
B) Rewards talent and performance
C) Creates economic and social mobility
D) All of the above are characteristics of new venture creation
Answer: D
Q4) Entrepreneurship is a proven force of economic and social ________.
Answer: mobility
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Chapter 2: The Entrepreneurial Mind: Crafting a Personal
Entrepreneurial
Strategy
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41 Verified Questions
41 Flashcards
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Sample Questions
Q1) Which is not true about self-assessment feedback?
A) It's hard to obtain B) It's hard to receive C) It's hard to benefit from D) All are true
Answer: D
Q2) In what ways is having Courage an important part of being an entrepreneur?
Answer: Courage has at least three important aspects in entrepreneurship.First,moral strength and principles:the character and the personal integrity to know right from wrong,and the will and commitment to act accordingly (to do the right thing).The second is being a fearless experimenter:a restlessness with convention and a rejection of the status quo.This relentless experimentation is enhanced by a third aspect of courage:a lack of fear of failing at the experiment-and most undertakings for that matter-and a lack of fear of conflicts that may arise.In other words,there is a mental toughness that is quite impervious to fears but is not ignorant or oblivious to possible consequences.
Q3) Name the conceptual scheme for thinking about the self-assessment process where there are two sources of information about the self: the individual,and others.
Answer: The Johari Window.
Page 4
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Chapter 3: The Entrepreneurial Process
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37 Verified Questions
37 Flashcards
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Sample Questions
Q1) Bootstrapping can create significant competitive advantages.
A)True
B)False
Answer: True
Q2) Small,simple businesses are more affordable,more manageable,less demanding,and less risky than high-potential ventures.
A)True
B)False
Answer: False
Q3) Entrepreneurship can include organizations of all types and in all stages.
A)True
B)False
Answer: True
Q4) A good opportunity will exhibit which of the following?
A) Gaps in available information and knowledge
B) Inconsistencies in existing service and quality
C) High rates of change
D) All of the above
Answer: D
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Chapter 4: Clean Commerce Is an Opportunity Sea Change
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41 Verified Questions
41 Flashcards
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Sample Questions
Q1) Which two are setting a high bar for international manufacturing standards?
A) China and India
B) Japan and Europe
C) The United States and Mexico
D) Australia and Taiwan
Q2) What parallel cannot be drawn between molecular thinking and the way entrepreneurs seek solutions?
A) Hero making
B) Attention to detail
C) Small,solvable pieces
D) Radical incrementalism
Q3) ________ is a concept of sustainability that stays;at the end of a product's useful life,its constituent materials (understood as assets,not waste)become inputs for new products or return safely to the earth.
Q4) What is green chemistry?
Q5) Weak ties lie outside the traditional network of relationships.
A)True
B)False
Q7) What are the advantages of establishing weak ties? Page 6
Q6) Method keeps R&D inside,but the company outsources ________.
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Page 7
Chapter 5: The Opportunity:
Creating,shaping,recognizing,seizing
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64 Verified Questions
64 Flashcards
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Sample Questions
Q1) What is a critical early step to avoid wasting time chasing venture capitalists,angels,and others when there is not a match between the venture the entrepreneur is pursuing and the interests or capacities?
Q2) For owners of small businesses,extremely long hours of 70,80,or even 100 hours a week,and rare vacations,are often the rule rather than the exception.
A)True
B)False
Q3) Which of the following relates to effective opportunity recognition?
A) Doing it first
B) Doing it better
C) Cross-association
D) All of the above
Q4) The United States has a _________-dominated economy.
Q5) One of the big differences between the growth- and equity-minded entrepreneur and the traditional small business owners is that the entrepreneur is willing to use leverage financing.
A)True
B)False
Q6) The best entrepreneurs specialize in making ________ mistakes only.
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Chapter 6: Screening Venture Opportunities
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14 Verified Questions
14 Flashcards
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Sample Questions
Q1) The single largest factor contributing to stillborn ventures and to those who will ripen as lemons is lack of focus on profitability and cash flow.
A)True
B)False
Q2) Name three sources of information that entrepreneurs can use to develop their venture opportunity profile.
Q3) What are the five anchors that are consistent with ideas that turn into superior businesses?
Q4) Which of the following is not an aspect of new venture success?
A) Failing quickly
B) Relieving pain
C) Discount pricing
D) All of the above are important aspects of new venture success.
Q5) First-time entrepreneurs tend to overestimate sales and delivery dates.What do they tend to underestimate?
Q6) With regard to screening new venture opportunities,why is time the ultimate ally and enemy of the entrepreneur?
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Page 9
Chapter 7: Opportunities for Social Entrepreneurship
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35 Verified Questions
35 Flashcards
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Sample Questions
Q1) Microlenders to the poorest of the poor must charge a high interest rate because of the high rate of defaults.
A)True
B)False
Q2) What is the mission of social entrepreneurship?
Q3) By definition,all entrepreneurship is social enterprising.
A)True
B)False
Q4) Entrepreneurs do not have to choose between social and economic enterprise paths.
A)True
B)False
Q5) What are the two types of enterprising nonprofits and how do they differ?
Q6) Using the Grameen Bank in Bangladesh as an example,explain how microlending works.
Q7) Venture philanthropy provides value-added funding for nonprofit organizations to increase their potential for developing revenue streams.
A)True
B)False
Page 10
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Chapter 8: The Business Plan
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20 Verified Questions
20 Flashcards
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Sample Questions
Q1) If a team is starting a venture that will not need startup capital,then it is appropriate to hold off on the business plan while they establish a base of sales.
A)True
B)False
Q2) Professional investors will discount the potential of an opportunity if they are initially presented with a dehydrated business plan.
A)True
B)False
Q3) The business plan becomes the point of departure for prospective investors to begin their ________ to ascertain potential and various risks of the venture.
Q4) When is it a good idea to hire an outside professional to write the business plan?
A) When time to market is a critical factor
B) When the lead entrepreneurs are deeply involved with other pursuits
C) It is not a good idea to hire an outside professional to write the business plan
D) When no one on the team is willing to take the lead in writing the document
Q5) Why is it important to develop a business plan?
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Chapter 9: The Entrepreneurial Leader and the Team
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42 Verified Questions
42 Flashcards
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Sample Questions
Q1) A ________ schedule ties the release of stock to a timeframe,usually of at least five and sometimes seven years or more,and to performance.
Q2) Cash is king,and there is never enough.
2.You will be out of cash much sooner than you think.
3.Sales are what count most.
4.Talent is the key to success.
5.Equity creation and realization determine the payoff.
Q3) Which of the following sources of influence is least important in rapid growth ventures?
A) Achieving goals
B) Hero making
C) Personal power
D) Resolving differences
Q4) Investors typically like to see what percent of the fully diluted company set aside for attracting future talent and creating incentives and rewards for high performance?
A) 5-10
B) 10-20
C) 20-30
D) Investors typically do not get involved at this level.
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Chapter 10: Ethical Decision Making and the Entrepreneur
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23 Verified Questions
23 Flashcards
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Sample Questions
Q1) Throughout the history of business,ethics have been relative to the social context of the times.
A)True
B)False
Q2) Who is associated with deontology-one's duty to act?
A) J.Stewart Mill
B) Aristotle
C) Kohlberg
D) Kant
Q3) When doing business abroad,entrepreneurs must adhere to the legal and ethical framework of their native country.
A)True
B)False
Q4) Serious mistakes,especially ethical ones,are rarely made during quiet and orderly times.
A)True
B)False
Q5) How does the concept known as 'the fog of war' relate to ethical behavior and the entrepreneurial experience?
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Chapter 11: Resource Requirements
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39 Verified Questions
39 Flashcards
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Sample Questions
Q1) Building a company by minimizing resources is referred to in colloquial terms as ________.
Q2) A board of advisors is an especially good alternative to a board of directors because they are authorized to make legal decisions.
A)True
B)False
Q3) Which of the following is not recommended as part of a productive board of directors?
A) A compensation committee
B) An audit committee
C) An executive committee
D) All are recommended
Q4) The best place to start in selecting an attorney is with acquaintances of the lead entrepreneur,of members of the management team,or the directors.
A)True B)False
Q5) A entrepreneur is legally bound by the decisions of a formal board of directors. A)True B)False
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Chapter 12: Franchising
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Sample Questions
Q1) A ________ profile segments potential customers based on social class,lifestyle,and personality traits.
Q2) At the center of the Franchise Relationship Model is the:
A) Customer
B) Market
C) Contract
D) Financial structure
Q3) Not all franchises have (or even need)a well-defined service delivery system.
A)True
B)False
Q4) In the Franchise Relationship Model,the financial structure flows from pro forma analysis of customer demand and the cost associated with development and execution of the ________.
Q5) Describe the entrepreneurial nature of the franchising model.
Q6) The service delivery system is the basis for a franchise venture's competitive advantage.
A)True B)False
Q7) What license agreement binds the franchisee to the purchase of a specifically branded product?
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Chapter 13: Entrepreneurial Finance
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32 Verified Questions
32 Flashcards
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Sample Questions
Q1) A new or existing business needs to obtain both equity and debt financing if it is to have a sound financial foundation.
A)True
B)False
Q2) Long-term borrowings mature in more than _________.
Q3) Mezzanine and bridge capital is available at what venture stage of development?
A) R&D
B) Startup
C) Early Growth
D) Exit
Q4) What leads and drives the financial strategy framework?
A) Financial requirements
B) Opportunity
C) Sources and deal structures
D) Financial strategy
Q5) Short-term debt is most often used by a business for working capital and is repaid out of the proceeds of its sales.
A)True
B)False
Q6) Short-term debt is incurred in ________ months or less.
Page 16
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Chapter 14: Obtaining Venture and Growth Capital
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41 Verified Questions
41 Flashcards
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Sample Questions
Q1) Interest from a venture capitalist can be predicted by the amount needed and the required rate of return expected.
A)True B)False
Q2) What are the three central issues that should be considered when beginning to think about obtaining risk capital?
(1)Does the venture need outside equity capital? (2)Do the founders want outside equity capital? and finally, (3)Who should invest?
Q3) A private placement may not be offered after a company has already gone public. A)True B)False
Q4) Discuss how timing is a critical aspect of raising risk capital.
Q5) Mezzanine is a debt instrument that does not require regular interest payments. A)True B)False
Q6) The verification of facts,backgrounds,and reputations of key people,market estimates,technical capabilities of the product,proprietary rights,and the like is an investigation for investors called ________.
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Chapter 15: The Deal: Valuation, structure, and Negotiation
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35 Verified Questions
35 Flashcards
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Sample Questions
Q1) While follow-on rounds can severely dilute the equity of the founders,early-round investors are insulated from that risk.
A)True
B)False
Q2) What are the three ingredients to an entrepreneurial valuation?
Q3) How long is the typical expected holding period for a second stage venture capital investment?
A) 3-5 years
B) 4-7 years
C) 5-10 years
D) More than 10 years
Q4) A company currently has 500,000 shares outstanding,which are owned by the current owners.If the venture capitalist requires a 28.5 percent ownership,what will be the total number of shares outstanding after the investment?
Q5) ________ financing is a strategy of last resort that wipes out all previously issued stocks when existing preferred shareholders will not commit additional funds.
Q6) A venture capitalist is investing $5 million to acquire 200,000 shares.What is the price per share?
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Chapter 16: Obtaining Debt Capital
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63 Verified Questions
63 Flashcards
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Sample Questions
Q1) Factoring is accomplished on a ________ value of the receivables pledged.
Q2) How can leasing provide tax advantages?
Q3) Finance companies have reasonable prepayment penalties.
A)True
B)False
Q4) Leasing credit criteria are very similar to the criteria used by commercial banks for equipment loans.
A)True
B)False
Q5) Term lenders stress the entrepreneurial and managerial abilities of the borrowing company.
A)True
B)False
Q6) Finance companies install measure in their agreements that help insure that they will not be immediately replaced by banks when a borrower's credit profile improves.
A)True
B)False
Q7) What should an entrepreneur look for when seeking to develop a constructive banking relationship?
Page 19
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Chapter 17: Leading Rapid Growth, crises, and Recovery
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Sample Questions
Q1) Identify three external forces that can cause a company to get into trouble.
Q2) In highly successful ventures,leadership is based on ________ rather than on authority.
Q3) Which bankruptcy filing gives a firm immediate protection from creditors?
A) Chapter 7
B) Chapter 11
C) Chapter 13
D) None of the above
Q4) Bankruptcy can provide only for the liquidation of the business;reorganization is not an option.
A)True
B)False
Q5) Which of the following can be the most disrupting event during a period of explosive growth?
A) Bringing in new senior management
B) Closing a round of expansion funding
C) Expanding of space or facilities
D) Overcoming a challenge from an entrenched competitor
Q6) Bankruptcy is a tremendous source of ________ power for a troubled company.
Q7) Describe the decline in morale at a troubled company.
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Chapter 18: The Family As Entrepreneur
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Sample Questions
Q1) The family ________ category is when an existing family company or group starts new businesses.
Q2) Family ________ occurs where the family's entrepreneurial activity is focused on creating new streams of value within the business or group through innovation and transformational change activities.
Q3) On what should an enterprising family's strategic thinking and planning be based?
Q4) The mindset continuum is primarily a measure of the ________ profile of the family owners-shareholders.
Q5) Studies indicate that family-influenced companies consistently outperform non-family businesses on annual shareholder return,return on assets,and both annual revenue and income growth.
A)True
B)False
Q6) Define 'transgenerational entrepreneurship'.
Q7) Organizational formalization has been shown to constrain entrepreneurial behavior in family enterprises.
A)True
B)False
21
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Chapter 19: The Harvest and Beyond
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Sample Questions
Q1) Which harvest option can have the negative attribute of forcing the leadership team to focus on short-term profits and performance results?
A) MBO
B) ESOP
C) IPO
D) Strategic Alliance
Q2) The authors write,"If impatience is the enemy of an attractive harvest,then greed is its executioner." To what are they referring to?
Q3) ________ are harvest vehicles through which founders can realize some liquidity from their stock by sales to the plan and other employees.
Q4) What is the most vital aspect of crafting a harvest strategy?
A) Capital
B) Timing
C) The Offering
D) Depends on the venture
Q5) What are the three core aspects of shaping a harvest strategy?
Q6) In a ________,founders can attract capital,often in substantial amounts,from a large company interested in their technologies.
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