Question 1

Use of debt to finance a new venture involves a payback of funds plus an interest fee for the use of the money.

Accepted Answer

A) True 
 B)False

Question 2

The most common source of debt financing is

Accepted Answer

A)  trade credit.
B)  factoring.
C)  commercial banks.
D)  finance companies.

Question 3

An informal risk capitalist is referred to as:

Accepted Answer

A)  your neighbor.
B)  a business angel.
C)  a retiree.
D)  someone with extra money to invest but who is not interested becoming an entrepreneur.

Question 4

The main objective of Regulation D is to

Accepted Answer

A)  increase investment in private placement.
B)  regulate new small-business investment.
C)  make it easier and less expensive for small ventures to sell stock.
D)  reduce debt financing by small enterprises.

Question 5

What are the major types and uses of debt financing?

Accepted Answer

Many new ventures find that debt financi...

Question 6

Venture capitalists,surprisingly,require little information before they make an investment.

Accepted Answer

A) True 
 B)False

Question 7

Equity financing is money invested in the venture with legal obligations to repay the principal amount of interest or interest rate on it.

Accepted Answer

A) True 
 B)False

Question 8

One of the advantages of public offerings is

Accepted Answer

A)  liquidity.
B)  disclosure.
C)  requirements.
D)  cost.

Question 9

What is the potential future of crowdfunding sites to raise capital with respect to entrepreneurs?

Accepted Answer

If the social equity investing sites (cr...

Question 10

Regulation D augments the regulations for reports and statements required for selling stock to private parties,friends,employees,customers,relatives,local professionals.

Accepted Answer

A) True 
 B)False

Question 11

Informal risk capitalists are often referred to as "business angels."

Accepted Answer

A) True 
 B)False

Question 12

Because the advantages of going public outweigh the disadvantages,it is in a corporation's best interest to go public.

Accepted Answer

A) True 
 B)False  False

Question 13

A disadvantage of debt financing is

Accepted Answer

A)  regular interest payments.
B)  possible cash flow enhancement.
C)  inhibition of growth and development due to equity investments.
D)  relinquishment of ownership.

Question 14

Sources of debt financing include trade credit,accounts receivables,factoring,and finance companies.

Accepted Answer

A) True 
 B)False

Question 15

Sophisticated investors are wealthy individuals who invest more or less regularly in new and/or early- and late-stage ventures.

Accepted Answer

A) True 
 B)False  True

Question 16

Advantages of debt financing include all of the following except:

Accepted Answer

A)  low interest rates that justify the opportunity cost.
B)  regular interest payments.
C)  potential greater return on equity.
D)  no relinquishment of ownership.

Question 17

Which is one of the most important questions for entrepreneurs to ask regarding venture capitalists?

Accepted Answer

A)  What is it like to work with their firm?
B)  Are they good communicators?
C)  Are they wealthy?
D)  Are they good at financial computation?

Question 18

The entrepreneur should ask the venture capitalist _____ questions.

Accepted Answer

A)  at most ten
B)  exactly twenty
C)  an unlimited number of
D)  no

Question 19

Major trends in the venture capital field today include all of the following except

Accepted Answer

A)  less specialized and more homogenous funds
B)  emerging feeder funds
C)  decrease in start-up investment amounts
D)  global reach A

Question 20

Which of the following statements is not true of venture capitalists?

Accepted Answer

A)  They want the entrepreneur and the management to run the company.
B)  They expect high return on investments.
C)  They are interested in trying to manage firms themselves.
D)  They take a long time to raise venture capital.

Exam 8: Sources of Capital for Entrepreneurs

Use of debt to finance a new venture involves a payback of funds plus an interest fee for the use of the money.

Correct AnswerverifiedShow Answer

The most common source of debt financing is

Correct AnswerverifiedShow Answer

An informal risk capitalist is referred to as:

Correct AnswerverifiedShow Answer

The main objective of Regulation D is to

Correct AnswerverifiedShow Answer

What are the major types and uses of debt financing?

Correct AnswerverifiedMany new ventures find that debt financi...View AnswerShow Answer

Venture capitalists,surprisingly,require little information before they make an investment.

Correct AnswerverifiedShow Answer

Equity financing is money invested in the venture with legal obligations to repay the principal amount of interest or interest rate on it.

Correct AnswerverifiedShow Answer

One of the advantages of public offerings is

Correct AnswerverifiedShow Answer

What is the potential future of crowdfunding sites to raise capital with respect to entrepreneurs?

Correct AnswerverifiedIf the social equity investing sites (cr...View AnswerShow Answer

Regulation D augments the regulations for reports and statements required for selling stock to private parties,friends,employees,customers,relatives,local professionals.

Correct AnswerverifiedShow Answer

Informal risk capitalists are often referred to as "business angels."

Correct AnswerverifiedShow Answer

Because the advantages of going public outweigh the disadvantages,it is in a corporation's best interest to go public.

Correct AnswerverifiedFalse

A disadvantage of debt financing is

Correct AnswerverifiedShow Answer

Sources of debt financing include trade credit,accounts receivables,factoring,and finance companies.

Correct AnswerverifiedShow Answer

Sophisticated investors are wealthy individuals who invest more or less regularly in new and/or early- and late-stage ventures.

Correct AnswerverifiedTrue

Advantages of debt financing include all of the following except:

Correct AnswerverifiedShow Answer

Which is one of the most important questions for entrepreneurs to ask regarding venture capitalists?

Correct AnswerverifiedShow Answer

The entrepreneur should ask the venture capitalist _____ questions.

Correct AnswerverifiedShow Answer

Major trends in the venture capital field today include all of the following except

Correct AnswerverifiedA

Which of the following statements is not true of venture capitalists?

Correct AnswerverifiedShow Answer

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Many new ventures find that debt financi...
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If the social equity investing sites (cr...
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False

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True

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A

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