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Exam 13: Financing for Startups

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Question 21

Multiple Choice

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In 2018,venture capitalists invested in ______ of seed-stage companies.

A) 15%
B) 7.5%
C) 25%
D) 1.5%

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Question 22

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______ is the company's value after it receives a round of financing.

A) Post-money valuation
B) Seed money valuation
C) Pre-money valuation
D) Startup valuation

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Question 23

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Minority business angels account for what percentage of the total angel investor population in the United States?

Entrepreneur Mike Moyer suggests creating a process for allocating equity based on the contributions made,including things like time,money,and intellectual property.

The general rule of thumb for new startups is to ______.

Typically,entrepreneurs value their companies based on its current financial performance.

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

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

Generally speaking,many corporate angels seek what within the venture?

______ is/are provided to help implement an entrepreneur's research and development.

An entrepreneur should keep 90% of the equity until the financing has been worked out.

The average partner in a VC firm will do ______ deals per year.

This action allows the stock to be purchased on the open market and gives investors a chance to get a return of cash.

What signals the end of the due diligence period?

Which of the following is a professional investor who generally invests in early-stage and emerging companies because of perceived long-term growth potential?

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).

Generally speaking,there are more minority angel funding groups in the United States than women angel groups.

Angel investors are eligible to invest as long as they are accredited investors.

If an entrepreneur issues convertible debt,he or she will lose control of the company.

When valuing a seed-stage,startup,or early-stage company,which of the following is most likely to be considered?