Archive for February 2017

_____ is a written document describing all relevant internal and external elements and strategies for starting a new venture; it helps determine the viability of the venture in a designated market, provides guidance to the entrepreneur in organizing his or her planning activities, and serves as an important tool in helping to obtain financing.

_____ is a written document describing all relevant internal and external elements and strategies for starting a new venture; it helps determine the viability of the venture in a designated market, provides guidance to the entrepreneur in organizing his or her planning activities, and serves as an important tool in helping to obtain financing.




Answer: Business Plan

___ is a written statement of marketing objectives, strategies, and activities to be followed in business plan; describes market conditions and strategy related to how the products and services will be distributed, priced, and promoted; includes pricing, distribution, promotion, product forecasts, controls.

___ is a written statement of marketing objectives, strategies, and activities to be followed in business plan; describes market conditions and strategy related to how the products and services will be distributed, priced, and promoted; includes pricing, distribution, promotion, product forecasts, controls.





Answer: Marketing plan

_____ describes form of ownership and lines of authority and responsibility of members of new venture; includes form of ownership, identification of partners or principal shareholders, authority of principals, management team background, roles and responsibilities of members of organization.

_____ describes form of ownership and lines of authority and responsibility of members of new venture; includes form of ownership, identification of partners or principal shareholders, authority of principals, management team background, roles and responsibilities of members of organization.




Answer: Organizational Plan

______ is a projections of key financial data that determine economic feasibility and necessary financial investment commitment; includes assumptions, pro forma income statement, cash flow projections, pro forma balance sheet, break-even analysis, sources and applications of funds.

______ is a projections of key financial data that determine economic feasibility and necessary financial investment commitment; includes assumptions, pro forma income statement, cash flow projections, pro forma balance sheet, break-even analysis, sources and applications of funds.





Answer: Financial Plan

______ provide inventor with a negative right excluding others from making using, or selling an article having the ornamental appearance given in the drawings included in the patent. A design patent has a term of 14 years.

______ provide inventor with a negative right excluding others from making using, or selling an article having the ornamental appearance given in the drawings included in the patent. A design patent has a term of 14 years.




Answer: Design patent.

List 10 Entrepreneurial Death Traps ?

List 10 Entrepreneurial Death Traps ?




1. The 50-50 Partnership.
2. The Three Musketeers Trap.
3. Single Customer Over-reliance.
4. Mousetrap Teams.
5. Pricing Strategy.
6. Insufficient Capitalization.
7. The Industry Norm Conundrum.
8. Never Ready Product Trap
9. Market Research Lite.
10. Market Segmentation Lite.

Primary responsibilities of board of directors ?

Primary responsibilities of board of directors ?



1. Reviewing and setting corporate strategy
2. Providing an outside viewpoint / oversight
3. Appointing senior management
4. Approving key personnel policies, including compensation
5. Approving changes to the articles of incorporation or bylaws
6. Approving IPO, merger, acquisition, dissolution or other liquidity options
7. Approving material transactions involving the assets of the company; new rounds of financing
8. Calling special meetings of the shareholders

Why companies Fail VC process ?

Why companies Fail VC process ?



1. Management team deficiency
2. Lack of "fit"
3. Unrealistic expectations/demands
4. Too complicated
5. Management fails to display "expertise"
6. Due diligence failure
7. "This is a product, not a company!"

How so VC firms deal with SUMI issues?

How so VC firms deal with SUMI issues?




1. Formal due diligence process
2. Staged financing
3. Syndication
4. Compensation Contracts
5. Covenants and Restrictions
6. Composition of Board of Directors

What are some reasons to decline investment? (11 Reasons)

What are some reasons to decline investment? (11 Reasons)




-Lack of an experienced team
-Didn't fit criteria
-No competitive advantage
-No clear strategy
-Company too small
-Company too early stage
-No barriers to entry
-Risk to return too high
-Low margins
-Valuation too high
-Company not profitable

What are some of the critical issues in Financing and Financing Sources?

What are some of the critical issues in Financing and Financing Sources?




Creating Value -How do you create value? Slicing the Value Pie -How are deals structured, what are tax implications? Covering Risk - How much money is needed, what sources are available what contacts need to be developed?

Define the contribution margin and its importance.

Define the contribution margin and its importance.



Selling price minus variable costs divided by number of units As long as the selling price is greater than the variable costs per unit, some contribution can be made to cover fixed costs. Eventually, these contributions will be sufficient to pay all fixed costs, at which point the firm has reached breakeven.

Which of the following is a disadvantage of using outside financing?

Which of the following is a disadvantage of using outside financing?




A. Outside capital decreases the firm's drive for sales and profits.
B. Outside capital decreases the company's flexibility.
C. Outside capital increases the venture's impulse to spend.
D. All of the above are true.






Answer: D

Accredited investors are:

Accredited investors are: 




A) investors who purchase over $5,000 of the venture's securities.
B) directors, executive officers, and general partners of the issuing company.
C) investors whose net worth is $500,000 or less.
D) investors with incomes in excess of $1,000,000 in each of the last two years.








Answer: B

Regulation D contains:

Regulation D contains:




A. provisions designed to simplify private offerings.
B. definitions of what constitutes a private offering.
C. specific operating rules & mdash; Rule 504, Rule 505, and Rule 506.
D. All of the above







Answer: D

Private offerings:

Private offerings:



A. must comply with Regulation D.
B. involve more time and expense than public offerings. C. do not involve the SEC.
D. all of the above.







Answer: A

Obtaining funds from private investors:

Obtaining funds from private investors:



A, is inappropriate for new ventures.
B. is a public offering.
C. is covered by Regulation D.
D. all of the above.







Answer: C

The Small Business Innovation Development Act:

The Small Business Innovation Development Act:




A. Requires federal agencies with R&D budgets over $100 million to award some of their funds to small businesses through a grant program.
B. provides a uniform method for selecting worthy research proposals.
C. provides funds to entrepreneurs through the SBIR grant program.
D. all of the above.






Answer: D

Most established R&D limited partnerships:

Most established R&D limited partnerships:



A. allow a minimum amount of equity dilution.
B. are successful.
C. reduce the risks involved in the venture.
D. both a and c.






Answer: D

In limited partnerships:

In limited partnerships:




A) the liability for any loss incurred is borne by the company.
B) there is no special tax benefit for partners.
C) the sponsoring company acts as the general partner.
D) the sponsoring company does not retain rights to use any base technology to develop other products.







Answer: C

The Small Business 7(a) Guaranty program:

The Small Business 7(a) Guaranty program: 




A) guarantees up to 85 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 $2 million.
D) all of the above







Answer: D

The Small Business 7(a) Guaranty program:

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 $5 million.
D) loans can be used only for machinery and equipment, and land and building.






Answer: B

Mortgage financing is another term for:

Mortgage financing is another term for:



A. large equipment asset-based financing.
B. real-estate asset-based financing.
C. sale-leaseback financing.
D. none of the above.







Answer: B

When inventory is the asset base for a loan:

When inventory is the asset base for a loan: 



A. a trust receipt may be used.
B. factoring may be arranged.
C. about 50 percent of it can be financed.
D. both a and c.






Answer: D

In a factoring arrangement, the factor:

In a factoring arrangement, the factor:




A. takes no risk and sustains no losses.
B. buys the accounts receivables of a firm.
C.receives no interest payment.
D. both a and c.






Answer: B

When using equity financing from family and friends:

When using equity financing from family and friends:



A. business arrangements should be kept strictly business.
B. details such as terms of the investment and rights of the investor should be in writing.
C. investors usually are more patient in desiring a return on investment.
D. all of the above.






Answer: D

Typically, debt financing requires:

Typically, debt financing requires:



A. an asset as collateral.
B. a degree of ownership in the firm.
C. reduction of short-term assets.
D. reduction of working capital.






Answer: A

Private offerings:

Private offerings:



A) must comply with Regulation D.
B) involve more time and expense than public offerings.
C) do not involve the SEC.
D) are not a viable option for new ventures.








Answer: A

A country's legal system regulates what three things?

A country's legal system regulates what three things?




1. its business practices
2. the manner in which business transactions are executed
3. the rights and obligations involved in any business transaction between parties

List the factors to be considered in determining the distribution system for a country.

List the factors to be considered in determining the distribution system for a country.




1. overall sales potential
2. amount and type of competition
3. cost and product
4. geographical size and density
5. investment policies
6. exchange rates and controls
7. level of political risk
8. overall marketing plan
9. infrastructure

Two Advantages of Entrepreneurial Partnering

Two Advantages of Entrepreneurial Partnering are




1. facilitates business transactions
2. updates the entrepreneur on business, economic, and political conditions

Three Impacts of Trade Barriers

Three Impacts of Trade Barriers




1. Increase costs of exporting products to a country
2. Limit entrepreneurs' ability to sell products in a country from production facilities outside the country
3. Necessitate re-locating production facilities to conform to local regulations

What are the three components of the nonverbal (or hidden) language of a culture?

What are the three components of the nonverbal (or hidden) language of a culture?




1. Time (How flexible are meeting times? Does 5:00 mean 5:00 on the dot or somewhere between 5:00 and 5:30?)
2. Space (Amount of physical space between individuals while talking)
3. Business relationships (how are business relationships formed and maintained?)

Name 3 sources of information available from the US government

Name 3 sources of information available from the US government




1. Census reports
2. Export/import authority
3. North American Industrial Classification System (NAICS) and Standard Industrial Classification (SIC) codes

What are the four sections of the opportunity assessment plan?

What are the four sections of the opportunity assessment plan?





1. A major section that develops the product/service idea.
2. A major section that focuses on the market (size, trend, characteristics, growth rate)
3. A minor section that focuses on entrepreneur and management team.
4. A minor section that develops a timeline indicating what steps need to be taken to successfully launch the venture.

How is the opportunity assessment plan different than a business plan? (List of 4)

How is the opportunity assessment plan different than a business plan? (List of 4)




1. Opportunity assessment plan is shorter.
2. Opportunity assessment plan focuses on the opportunity, not the venture.
3. Opportunity assessment plan has no computer based spreadsheet
4. Opportunity assessment plan is the basis for making the decision to either act on an opportunity or wait until another, better opportunity comes along.

A limited liability corporation:

A limited liability corporation:



A) has unlimited liability.
B) is automatically taxed as a partnership.
C) is decreasing in popularity among venture capitalists.
D) had been the most popular choice of organization structure by new ventures and small businesses.







Answer: B

The board of advisors:

The board of advisors:



A) is subject to regulations stipulated in the Sarbanes-Oxley Act.
B) has no legal status.
C) is not advisable in a family-owned business.
D) is likely to meet more frequently.






Answer: B

Which of the following is NOT a characteristic of a marketing plan?

Which of the following is NOT a characteristic of a marketing plan?



A) It should provide a strategy.
B) It should be based on facts and valid assumptions.
C) It should be flexible.
D) It should be long and detailed.






Answer: D

What is a target market?

What is a target market?



A) A group of customers a venture reaches by accident.
B) All consumers who purchase the venture's product.
C) A specific group of potential customers toward which a venture aims its marketing plan.
D) A chain of discount stores.






Answer: C

The marketing mix consists of:

The marketing mix consists of:



A) product, price, research, and promotion.
B) product, research, distribution, and promotion.
C) product, price, distribution, and promotion.
D) product, price, distribution, and research.




Answer: C

Marketing research begins with:

Marketing research begins with:



A) setting the advertising budget.
B) definition of objectives or purpose.
C) identifying direct marketing strategy.
D) collecting a list of primary and secondary sources of information.





Answer: B

The tendency among many entrepreneurs is to:

The tendency among many entrepreneurs is to:




A)avoid planning.
B)not take initiative.
C)not market their product or services.
D)lose focus on the business plan.







Answer: A

The business plan is designed to guide the entrepreneur:

The business plan is designed to guide the entrepreneur:



A)through the first year of operations.
B)through the distribution process.
C)in the financing process.
D)in case of a change in ownership.






Answer: A

The organization plan describes the business':

The organization plan describes the business':




A)physical plant and machinery layout.
B)location as well as its plant(s).
C)system of distribution.
D)form of ownership.





Answer: D

The part of the plan that describes the location and size of the business, the personnel and office equipment that will be needed, and the history of the venture is called the:

The part of the plan that describes the location and size of the business, the personnel and office equipment that will be needed, and the history of the venture is called the:




A)organizational plan.
B)description of the venture.
C)production plan.
D)executive summary.






Answer: B

The executive summary section should:

The executive summary section should:



A)be prepared before the total plan is written.
B)highlight key financial milestones that have been achieved.
C)be about two to three pages in length.
D)try to summarize every section of the plan.






Answer: C

The usefulness of the title or introductory page is:

The usefulness of the title or introductory page is:




A)that it provides information about the company.
B)such that it requires several pages.
C)questionable, especially to investors.
D)that it contains backup data.







Answer: A

When collecting marketing information the entrepreneur should:

When collecting marketing information the entrepreneur should:




A)not include general environmental information.
B)start with narrow-based data and work down to a more broader scope of information.
C)identify competitors.
D)not aim to define a specific market.








Answer: C

While preparing the first draft of the business plan, the entrepreneur should not:

While preparing the first draft of the business plan, the entrepreneur should not:



A) prepare it from his or her personal viewpoint.
B) take into consideration the constituencies that will ultimately read and evaluate the plan's feasibility.
C) prepare it with an aim to identify possible barriers to success.
D) try to define the goals and objectives of the venture.






Answer: B

The depth and detail of a business plan depend on:

The depth and detail of a business plan depend on:





A)the target audience.
B)the experience of the entrepreneur.
C)the size and scope of the new venture.
D)the amount of capital needed.






Answer: C

Which of the following statements is (are) true?

Which of the following statements is (are) true?




A)The business plan describes both internal and external elements.
B)The preliminary business plan should be prepared by a lawyer.
C)Most business plan resources on the Internet are too complex and expensive to beof use to the new venture.
D)Once made, a business plan should not be changed.







Answer: A

The business plan presentation for potential investors:

The business plan presentation for potential investors:




A) should be presented only in writing.
B) should contain no negative projections.
C) should enable the entrepreneur to "sell" his or her business concept in a designated period of time.
D) should provide the entrepreneur's own perspective.






Answer: C

A production plan usually includes:

A production plan usually includes:



A) pricing.
B) evaluation of the weaknesses of the business.
C) names of suppliers of raw materials.
D) flow of orders for goods and/or services.







Answer: C

The courts consider oral agreements under $500 binding if:

The courts consider oral agreements under $500 binding if:




A)the agreement is for less than one year.
B)the parties have previously done business together.
C)the transaction is for services rendered.
D)the new venture is incorporated.






Answer: A

Entrepreneurs should purchase insurance

Entrepreneurs should purchase insurance




A)before problems occur.
B)to prevent problems.
C)after problems occur.
D)only if they engage in international trade.






Answer: A

The best protection against product liability is:

The best protection against product liability is:



A)product warranty insurance.
B)to overstate the benefits of a product.
C)to produce safe products.
D)the utility patent






Answer: C

Trade secrets are protected:

Trade secrets are protected:



A)by the General Agreement on Tariffs and Trade.
B)by federal law.
C)by state law.
D)by the Library of Congress.







Answer: C

Copyrights are registered with:

Copyrights are registered with:



A)the U.S. Justice Department.
B)the Internet Commission.
C)the Library of Congress
D)the GATT







Answer: C

To apply for a trademark:

To apply for a trademark:




A)the mark must actually have been used on goods.
B)intent to use the mark is required.
C)the mark must be copyrighted.
D)the mark must have been used on goods that are already traded.







Answer: B

Which of the following statements is (are) not true?

Which of the following statements is (are) not true?




A)A trademark may be a word, slogan, symbol, design or particular sound.
B)Unlike a patent, trademark does not last indefinitely.
C)It is possible to file for a trademark if you intend to use this mark in the future.
D)There are four categories of trademarks.






Answer: B
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