1
The three primary reasons that people become entrepreneurs and start their own firms are to:
A) gain prestige, realize financial rewards, and eliminate risk in their lives
B) do what they were "born" to do, be their own boss, and gain prestige
C) take big risks, be their own boss, and do what they were "born" to do
D) be their own boss, pursue their own ideas, and pursue financial rewards
E) take advantage of government subsidies, pursue their own ideas, and realize financial rewards
D) be their own boss, pursue their own ideas, and pursue financial rewards
Which of the following is NOT a component of the Business Model Canvas?
A) Key Activities
B) Key Resources
C) Revenue Streams
D) Feasibility Proposition
E) Customer Segments
D) Feasibility Proposition
If a startup pioneers an industry or a new concept within an industry, the name recognition the startup establishes may create a formidable nontraditional barrier to entry referred to as a(n):
A) unique business model
B) aggressive supremacy
C) competitive superiority
D) first-mover advantage
E) aggressive tactical advantage
D) first-mover advantage
A board of directors' three formal responsibilities are to:
A) periodically update the firm's business plan, declare dividends, and write the firm's marketing plan
B) appoint the officers of the firm, declare dividends, and oversee the affairs of the corporation
C) write the firm's strategic plan, declare dividends, and conduct the annual meeting
D) appoint the officers of the firm, conduct the annual meeting, and submit the firm's annual report to the Securities & Exchange Commission
E) provide funding to the firm, write the firm's strategic plan, and submit the firm's annual report to the Securities & Exchange Commission
B) appoint the officers of the firm, declare dividends, and oversee the affairs of the corporation
For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?
A) Business research
B) Costs associated with building a brand
C) Cash flow challenges
D) Capital investments
E) Personnel costs
D) Capital investments
Four main characteristics of successful entrepreneurs are:
A) passion for the business, on the cutting edge of technological change, very charismatic, and tenacity despite failure
B) young and energetic, passion for the business, product/customer focus, and seeks recognition
C) passion for the business, tenacity despite failure, product/customer focus, and execution intelligence
D) on the cutting edge of technological change, forward thinking, tenacity despite failure, and product/customer focus
E) passion for the business, seeks recognition, young and energetic, and execution intelligence
C) passion for the business, tenacity despite failure, product/customer focus, and execution intelligence
Which component of the Business Model Canvas discusses the unique offering or solution that a business offers its customers?
A) Key Activities
B) Value Proposition
C) Channels
D) Revenue Streams
E) None of the Above
B) Value Proposition
Porter's Five Forces model can be used in the following two ways:
A) first, to help a firm determine whether it should enter an industry in an aggressive or a conservative manner, and second, to help a firm determine whether to compete in international markets in that industry.
B) first, to help a firm determine if it should enter a single or multiple niches in an industry, and second, to help a firm determine whether it can be competitive in that industry
C) first, to help a firm determine what industry it is best equipped to compete in, and second, to help a firm determine whether to compete in international markets in that industry
D) first, to help a firm determine what niche to enter within an industry, and second, to help a firm determine whether it can be competitive in that industry
E) first, to help a firm determine whether it should enter a particular industry, and second, to help a firm discern whether it can carve out an attractive position in that industry
E) first, to help a firm determine whether it should enter a particular industry, and second, to help a firm discern whether it can carve out an attractive position in that industry
Financial management deals with two things—raising money and:
A) operations management
B) inventory control
C) managing a company's finances
D) production management
E) supply chain management
C) managing a company's finances
According to our textbook, the seed money that gets a company off the ground typically comes from ________.
A) angel investors
B) venture capitalists
C) commercial banks
D) governmental agencies
E) the founders of the firm
E) the founders of the firm
The three ways to identify an opportunity include:
A) observing trends, solving a problem, and finding gaps in the marketplace
B) studying industry trade journals, talking to other entrepreneurs, and solving a problem
C) observing trends, conducting brainstorming sessions, and studying industry trade journals
D) observing trends, talking to other entrepreneurs, and finding gaps in the marketplace
E) reading books, solving a problem, and findings gaps in the marketplace
A) observing trends, solving a problem, and finding gaps in the marketplace
Which component of the Business Model Canvas involves defining the customer base, or the types of people (or businesses) the company will target?
A) Customer Relationships
B) Key Partners
C) Channels
D) Customer Segments
E) None of the Above
D) Customer Segments
Elizabeth Swann opened a clothing boutique two years ago. Unfortunately, the boutique failed after 18 months. Swann attributes the failure of her boutique to the fact that her employees couldn't adjust quickly enough to their new roles and that her boutique lacked a "track record" with outside buyers and sellers, which made it difficult to form partnerships and make sales. Swann suffered from what research calls the:
A) burden of novelty
B) millstone of innovation
C) liability of newness
D) liability of preparedness
E) burden of newness
C) liability of newness
The four main financial objectives of a firm are:
A) efficiency, effectiveness, strength, and flexibility
B) power, success, efficiency, and effectiveness
C) control, effectiveness, liquidity, and power
D) success, strength, liquidity, and profitability
E) profitability, liquidity, efficiency, and stability
E) profitability, liquidity, efficiency, and stability
Being resourceful and using your creativity and ingenuity to figure out how to get your business up and running without the need for external funding refers to:
A) networking
B) reaching
C) scrounging
D) prospecting
E) bootstrapping
E) bootstrapping
The ability to notice opportunities without engaging in deliberate search is referred to as:
A) cognitive alertness
B) cognitive awareness
C) managerial alertness
D) entrepreneurial alertness
E) individual awareness
D) entrepreneurial alertness
Once a firm decides to enter an industry and chooses a market in which to compete, it must gain an understanding of its competitive environment. This challenge can be undertaken by completing a(n) ________ analysis.
A) business
B) industry
C) competitor
D) strategic
E) market
C) competitor
An individual who has the ability to build and maintain relationships with people whose interests are similar or whose relationships could bring advantages to their new venture is characterized as a good:
A) networker
B) socializer
C) linker
D) assembler
E) connector
A) networker
Match the financial objective with its correct definition.
A) Stability — the overall health of the financial structure of the firm
B) Profitability — how productively a firm utilizes its assets
C) Liquidity — a company's ability to make a profit
D) Efficiency — a company's ability to meet its short-term obligations
E) Profitability — the overall health of the financial structure of the firm, particularly as it relates to its debt-to-equity ratio
A) Stability — the overall health of the financial structure of the firm
Which of the following statements is incorrect regarding equity funding?
A) Equity investors expect to get their money back, along with a substantial capital gain, through the sale of their stock.
B) Angel investors are a common source of equity funding.
C) Equity funding is not a loan.
D) Equity investors are very demanding.
E) Equity investors fund the majority of the plans they consider.
E) Equity investors fund the majority of the plans they consider.
Established companies that have high levels of corporate entrepreneurship tend to be:
A) innovative, risk averse, and take a "wait and see" posture
B) taking a "wait and see" posture, innovative, and risk taking
C) proactive, not innovative, and risk taking
D) taking a "wait and see" posture, not innovative, and risk averse
E) proactive, innovative, and risk taking
What is E) proactive, innovative, and risk taking
Which of Porter's five forces is most directly influenced by the number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs?
A) Threat of New Entrants
B) Rivalry Among Existing Firms
C) Threat of Substitutes
D) Bargaining Power of Buyers
E) Bargaining Power of Suppliers
B) Rivalry Among Existing Firms
A(n) ________ is a chart that depicts the most important skills that are needed in a new venture and where skills gaps exist.
A) expertise report
B) talent profile
C) abilities summary
D) skills profile
E) talent summary
D) skills profile
The three primary reasons startups need funding are:
A) cash flow challenges, capital investments, and lengthy product development cycles
B) business research, cash flow challenges, and costs associated with building a brand
C) bonuses for members of the new venture team, attorney fees, and lengthy product development cycles
D) attorney fees, capital investments, and marketing research
E) bonuses for members of the new venture team, marketing research, and personnel costs
A) cash flow challenges, capital investments, and lengthy product development cycles
________ are partnerships of money managers who raise money in "funds" to invest in startups and growing firms.
A) Venture capital firms
B) Business angels
C) Institutional investors
D) Investment bankers
E) Business capitalists
A) Venture capital firms