Question 1

An entrepreneur is asking for $1 million for 30% of his company.What is the entrepreneur's post-money valuation?

Accepted Answer

A)  $3.33 million
B)  $300,000
C)  $2 million
D)  it cannot be determined

Question 2

A study of 212 U.S.startups form the late 1990s and early 2000s showed that what percentage of the founders were no longer CEO after three years?

Accepted Answer

A)  50%
B)  80%
C)  20%
D)  12%

Question 3

When working with a venture capitalist,it is possible to be demoted within your own company.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is another term for convertible debt?

Accepted Answer

A)  convertible bond
B)  convertible stock
C)  loan forgiveness
D)  revolving debt

Question 5

Venture capital became more organized and professional with the 1946 creation of American Research and Development.

Accepted Answer

A) True 
 B)False  True

Question 6

You and your cofounders have spent a year building and testing a home wireless system that is easy to install and will integrate media streaming from phones,television,and the Internet.You have tested the product on family and friends and built a prototype.You now need money to build a pilot test,creating 100 systems and placing them in a display at five selected stores.Identify the best source(s)of capital that you and your cofounders should seek (you will need $100,000).

Accepted Answer

As an early-stage company,and ...

Question 7

______ angels are individuals who have already started and successfully operated their own businesses.

Accepted Answer

A)  Corporate
B)  Entrepreneurial
C)  Professional
D)  Enthusiast

Question 8

One of the main advantages of convertible debt is that it ______.

Accepted Answer

A)  doesn't need money to be paid back
B)  removes the need for valuation
C)  is less expensive than other types of loans
D)  eliminates a need for venture capitalist funds

Question 9

What type of investment vehicle do venture capital money managers typically use?

Accepted Answer

A)  bank loan
B)  limited partnership fund
C)  angel account
D)  investment bonds B

Question 10

A/an ______ is a type of investor who uses his or her own money to provide funds to young startup private businesses run by entrepreneurs who are neither friends nor family.

Accepted Answer

A)  seed investor
B)  bridge investor
C)  equity investor
D)  angel investor

Question 11

Which type of angel is most likely to intervene if the business is not going well?

Accepted Answer

A)  entrepreneur
B)  professional
C)  enthusiast
D)  micromanagement

Question 12

One of the main advantages of convertible debt is that it is attractive to investors because ______.

Accepted Answer

A)  their risk of loss is minimized
B)  they will be repaid for the loan when the company is successful
C)  they may be entitled to discounts on the share price
D)  they will be the first to own stock in your company

Question 13

______ is a short-term loan that can be turned into equity when future financing is issued.

Accepted Answer

A)  Convertible debt
B)  Angel funding
C)  A business loan
D)  An equity loan

Question 14

Because they are investors,angel investors and venture capitalists do not usually have an exit plan.

Accepted Answer

A) True 
 B)False

Question 15

In 1979,the venture capital industry benefited from what action?

Accepted Answer

A)  an economic boom
B)  the ability of a pension fund to invest in venture capital
C)  federal fund availability to entrepreneurs
D)  the ability of small businesses to offer stock

Question 16

If an entrepreneur receives $275,000 from venture capitalists in exchange for stock,what do the investors receive in return?

Accepted Answer

A)  royalties from future sales
B)  equity in the business
C)  access to the first round of product
D)  guaranteed board appointments

Question 17

How much return does a typical angel investor expect from his or her investment?

Accepted Answer

A)  Angel investors have no expectation of return.
B)  double the amount invested within 2 years
C)  10 times the investment in 5 years
D)  3 times the investment within 3 years

Question 18

How far back can we track the history of venture capital?

Accepted Answer

A)  to the dot com investments of the early 90s
B)  to venture capital startups in the 1980s
C)  to the 1958 Small Business Investment Act
D)  to early 20th-century investors such as the Rockefellers and the Bessemers

Question 19

An investor offers $150,000 for 30% of the company.What is the post-money valuation of the company?

Accepted Answer

A)  $350,000
B)  $500,000
C)  $50,000
D)  It cannot be determined. B

Question 20

How often will additional funding be awarded by a VC,assuming the company is growing?

Accepted Answer

A)  every 8 years
B)  every 10 years
C)  every year or two
D)  every 5 years

Exam 13: Financing for Startups

An entrepreneur is asking for $1 million for 30% of his company.What is the entrepreneur's post-money valuation?

Correct Answer
verified

A study of 212 U.S.startups form the late 1990s and early 2000s showed that what percentage of the founders were no longer CEO after three years?

Correct Answer
verified

When working with a venture capitalist,it is possible to be demoted within your own company.

Correct Answer
verified

Which of the following is another term for convertible debt?

Correct Answer
verified

Venture capital became more organized and professional with the 1946 creation of American Research and Development.

Correct Answer
verified
True

Correct Answer
verified
As an early-stage company,and ...
View Answer

______ angels are individuals who have already started and successfully operated their own businesses.

Correct Answer
verified

One of the main advantages of convertible debt is that it ______.

Correct Answer
verified

What type of investment vehicle do venture capital money managers typically use?

Correct Answer
verified
B

A/an ______ is a type of investor who uses his or her own money to provide funds to young startup private businesses run by entrepreneurs who are neither friends nor family.

Correct Answer
verified

Which type of angel is most likely to intervene if the business is not going well?

Correct Answer
verified

One of the main advantages of convertible debt is that it is attractive to investors because ______.

Correct Answer
verified

______ is a short-term loan that can be turned into equity when future financing is issued.

Correct Answer
verified

Because they are investors,angel investors and venture capitalists do not usually have an exit plan.

Correct Answer
verified

In 1979,the venture capital industry benefited from what action?

Correct Answer
verified

If an entrepreneur receives $275,000 from venture capitalists in exchange for stock,what do the investors receive in return?

Correct Answer
verified

How much return does a typical angel investor expect from his or her investment?

Correct Answer
verified

How far back can we track the history of venture capital?

Correct Answer
verified

An investor offers $150,000 for 30% of the company.What is the post-money valuation of the company?

Correct Answer
verified
B

How often will additional funding be awarded by a VC,assuming the company is growing?

Correct Answer
verified

Exam 13: Financing for Startups

An entrepreneur is asking for $1 million for 30% of his company.What is the entrepreneur's post-money valuation?

Correct AnswerverifiedShow Answer

A study of 212 U.S.startups form the late 1990s and early 2000s showed that what percentage of the founders were no longer CEO after three years?

Correct AnswerverifiedShow Answer

When working with a venture capitalist,it is possible to be demoted within your own company.

Correct AnswerverifiedShow Answer

Which of the following is another term for convertible debt?

Correct AnswerverifiedShow Answer

Venture capital became more organized and professional with the 1946 creation of American Research and Development.

Correct AnswerverifiedTrue

Correct AnswerverifiedAs an early-stage company,and ...View AnswerShow Answer

______ angels are individuals who have already started and successfully operated their own businesses.

Correct AnswerverifiedShow Answer

One of the main advantages of convertible debt is that it ______.

Correct AnswerverifiedShow Answer

What type of investment vehicle do venture capital money managers typically use?

Correct AnswerverifiedB

A/an ______ is a type of investor who uses his or her own money to provide funds to young startup private businesses run by entrepreneurs who are neither friends nor family.

Correct AnswerverifiedShow Answer

Which type of angel is most likely to intervene if the business is not going well?

Correct AnswerverifiedShow Answer

One of the main advantages of convertible debt is that it is attractive to investors because ______.

Correct AnswerverifiedShow Answer

______ is a short-term loan that can be turned into equity when future financing is issued.

Correct AnswerverifiedShow Answer

Because they are investors,angel investors and venture capitalists do not usually have an exit plan.

Correct AnswerverifiedShow Answer

In 1979,the venture capital industry benefited from what action?

Correct AnswerverifiedShow Answer

If an entrepreneur receives $275,000 from venture capitalists in exchange for stock,what do the investors receive in return?

Correct AnswerverifiedShow Answer

How much return does a typical angel investor expect from his or her investment?

Correct AnswerverifiedShow Answer

How far back can we track the history of venture capital?

Correct AnswerverifiedShow Answer

An investor offers $150,000 for 30% of the company.What is the post-money valuation of the company?

Correct AnswerverifiedB

How often will additional funding be awarded by a VC,assuming the company is growing?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified
As an early-stage company,and ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified