Question 1

It often takes four months or more to identify and hire key employees.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following personality traits best predicts entrepreneurial success?

Accepted Answer

A)  Analytical
B)  Driver
C)  Expressive
D)  Amiable
E)  None of the above

Question 3

According to the chapter, which of the following is not an acceptable means of maintaining an entrepreneurs' personal cash flow?

Accepted Answer

A)  Working full-time and devoting time to the new venture
B)  Working part-time and devoting time to the new venture
C)  Living off personal savings
D)  Living for his/her spouses' income
E)  All of the above are acceptable

Question 4

The size of your organization is inversely correlated to the amount of revenue your business can derive

Accepted Answer

A) True 
 B)False

Question 5

What is the minimum expected level of lawyers' fees?

Accepted Answer

A)  $50/hour
B)  $100/hour
C)  $150/hour
D)  $200/hour
E)  $250/hour

Question 6

What are the disadvantages of distributing founder shares equally among all co-founders?

Accepted Answer

A)  The lack of a primary shareholder slows down the decision making process
B)  CEO may be doing as much work as CEOs of comparable companies, but have less potential upside
C)  Such distribution makes unwanted acquisitions easy
D)  A and B
E)  A and C

Question 7

If you decide to start a venture, you should notify your current employer as soon as possible.

Accepted Answer

A) True 
 B)False

Question 8

Founder shares should be distributed equally between all founders.

Accepted Answer

A) True 
 B)False

Question 9

What opportunities can a young company offer its potential team members?

Accepted Answer

A)  Growth into higher management positions
B)  Above average market salaries
C)  More attractive social benefits packages
D)  Secure and stable jobs
E)  All of the above

Question 10

Which factor should you consider when choosing a lawyer:

Accepted Answer

A)  Size of the firm
B)  Billing rates
C)  A lawyer that has a deep knowledge of the industry
D)  If you get along
E)  All of the above

Question 11

According to Inc.500, what percent of entrepreneurs start businesses with their friends or family members?

Accepted Answer

A)  Less than 5%
B)  About 10%
C)  About 20%
D)  Approximately 40%
E)  More than 65%

Question 12

Explain why solo entrepreneurs are generally less successful than team players.

Accepted Answer

a.A team is able to do more than the ent...

Question 13

What does the movie, Startup.com, demonstrate?

Accepted Answer

A)  How outside financing contributes to equity
B)  How expensive lawyers can be
C)  How working together can affect the relationship of two lifelong friends
D)  How much the government is willing to help young entrepreneurs
E)  None of the above

Question 14

You are least likely to resolve an interpersonal conflict in your team by:

Accepted Answer

A)  Firing one of the parties
B)  Hiring an outside expert who is perceived as a neutral party
C)  Explaining to the parties involved that their arguments reduce the team's efficiency
D)  Mediating between the parties
E)  Transferring one of the parties to another team

Question 15

In the early years, it is critical for firms to focus on revenue-generating employees, instead of support staff.

Accepted Answer

A) True 
 B)False

Question 16

Free resources are poor substitutes for a qualified lawyer.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following should the founder of the venture do first when deciding whether or not to be the CEO of his company?

Accepted Answer

A)  Ask for his/her friends opinion
B)  Take at least three personality tests
C)  Review his/her resume
D)  Work as a hired manager for at least 4 years
E)  Consult with his/her team members

Question 18

How much equity is commonly set aside for employee options?

Accepted Answer

A)  15-20%
B)  20-25%
C)  25-30%
D)  35-40%
E)  45-50%

Question 19

Options give the holder the right to:

Accepted Answer

A)  Increase the number of the company shares he is allowed to purchase
B)  Buy a share in the company at a below-market rate
C)  Secure a salary increase on a regular basis
D)  Sell his stocks on the open market for more than the prevailing market price
E)  Demand a refund on his contribution to company's equity

Question 20

Give examples of compensations used to make your start-up attractive for valuable team members.

Accepted Answer

a.Founder Shares
b.O...

Exam 6: Building the Founding Team

Options give the holder the right to:

Correct AnswerverifiedShow Answer

How much equity is commonly set aside for employee options?

Correct AnswerverifiedShow Answer

What is the minimum expected level of lawyers' fees?

Correct AnswerverifiedShow Answer

Free resources are poor substitutes for a qualified lawyer.

Correct AnswerverifiedShow Answer

Which of the following should the founder of the venture do first when deciding whether or not to be the CEO of his company?

Correct AnswerverifiedShow Answer

Which of the following personality traits best predicts entrepreneurial success?

Correct AnswerverifiedShow Answer

In the early years, it is critical for firms to focus on revenue-generating employees, instead of support staff.

Correct AnswerverifiedShow Answer

What opportunities can a young company offer its potential team members?

Correct AnswerverifiedShow Answer

Which factor should you consider when choosing a lawyer:

Correct AnswerverifiedShow Answer

According to Inc.500, what percent of entrepreneurs start businesses with their friends or family members?

Correct AnswerverifiedShow Answer

Explain why solo entrepreneurs are generally less successful than team players.

Correct Answerverifieda.A team is able to do more than the ent...View AnswerShow Answer

You are least likely to resolve an interpersonal conflict in your team by:

Correct AnswerverifiedShow Answer

According to the chapter, which of the following is not an acceptable means of maintaining an entrepreneurs' personal cash flow?

Correct AnswerverifiedShow Answer

What are the disadvantages of distributing founder shares equally among all co-founders?

Correct AnswerverifiedShow Answer

Give examples of compensations used to make your start-up attractive for valuable team members.

Correct Answerverifieda.Founder Sharesb.O...View AnswerShow Answer

The size of your organization is inversely correlated to the amount of revenue your business can derive

Correct AnswerverifiedShow Answer

What does the movie, Startup.com, demonstrate?

Correct AnswerverifiedShow Answer

If you decide to start a venture, you should notify your current employer as soon as possible.

Correct AnswerverifiedShow Answer

Founder shares should be distributed equally between all founders.

Correct AnswerverifiedShow Answer

It often takes four months or more to identify and hire key employees.

Correct AnswerverifiedShow Answer

Correct Answer
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a.A team is able to do more than the ent...
View Answer

Correct Answer
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Correct Answer
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a.Founder Shares
b.O...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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