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_____ is the group of founders, key employees, and advisers that move a venture from an idea to a fully functioning firm.
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Attending entrepreneurship-focused workshops, speaker series, and entrepreneurship boot camps is a way to overcome what is referred to as the ________.
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mana 3325 final
chapter quizes for ch 9,10,11,12
| Question | Answer |
|---|---|
| _____ is the group of founders, key employees, and advisers that move a venture from an idea to a fully functioning firm. | A new venture team |
| Attending entrepreneurship-focused workshops, speaker series, and entrepreneurship boot camps is a way to overcome what is referred to as the ________. | liability of newness |
| A founding team comprised of executives who all worked together in pharmaceutical sales since graduating from college, where they each majored in human biology, would best be described as________. | homogenous |
| What is MOST suggested as a consistent predictor of future entrepreneurial performance? | prior entrepreneurial experience |
| What is NOT a formal responsibility of a board of directors? | manage the firm's day-to-day transactions |
| Well-known and respected board members bring instant credibility to the firm; this phenomenon is referred to as ________. | signaling |
| _____ is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis. | An advisory board |
| What is not expected of a board of advisers: | a firm should ask their advisors to spread, anonymously, as many positive comments as possible about its products on blogs, and Internet chat rooms and message forums. |
| The following are ways investors and lenders add value to an entrepreneurial venture EXCEPT: | certify the financial statements. |
| Which of the following is comprised of retired business owners who provide free consulting services to small businesses? | SCORE |
| T/F Studies show that the majority of new ventures are started by more than one individual. | True |
| T/F It is generally believed that new ventures started by a team have an advantage over those started by an individual. | False |
| T/F The Chief Executive Officer (CEO) of a new venture always is chosen from among the firm's founders. | False |
| T/F If a new venture organizes as a corporation, it is legally required to have a board of directors. | True |
| T/F An outside director is an employee of the firm. | False |
| T/F Because the board members of large firms are more likely to be well-compensated executives of other firms, large firms do not typically pay their board members. | False |
| T/F If a firm has a board of directors (because it is a corporation), it will not have an advisory board. | False |
| T/F A lender with a well-secured loan may spend very little time with a client. | True |
| T/F Investors are precluded by SEC regulations from having a seat on the board of directors. | False |
| T/F Expert advice to new ventures from consultants can be obtained for free or reduced rates from nonprofit agencies. | True |
| When is a firm required to have a board of directors | If a new venture organizes as a corporation, it is required to have a board of directors.:. |
| what are the board of directors three formal responsibilities? | 1) appoint the firm's officers/key managers, 2) declare dividends, and 3) oversee the affairs of the corporation |
| What are the three groups other than the board of directors that may be a source of assistance and support for the firm. | BOARD OF ADVISERS, LENDERS AND INVESTORS, CONSULTANTS |
| What purpose does BOARD OF ADVISERS serve: | a panel of experts who are asked by the firm's managers to provide counsel and advice on an ongoing basis. |
| What purpose does LENDERS AND INVESTORS serve: | lenders and investors help new firms by providing guidance and legitimacy, and providing the role of financial oversight. |
| What purpose do CONSULTANTS serve: | paid or unpaid individuals who provide professional or expert advice |
| Most new ventures need to raise money during their early life for the following reasons EXCEPT: | to pay dividends. |
| _____ is the rate at which a company is spending its capital until it reaches profitability. | Burn rate |
| What is the least likely source of seed money that gets a new venture started? | a bank line of credit |
| _____ is a brief, carefully constructed statement that outlines the merits of a business opportunity. | An elevator speech |
| Which of the following is NOT a common source of equity funding? | Banks |
| Entrepreneurs take their firms public for many reasons but not: | to broaden their ownership interest. |
| Which of the following is NOT a common source of debt financing for a new venture? | corporate bonds |
| Unlikely reason that commercial banks have not been viewed as practical sources of financing for new ventures: | unlike venture capitalists who look for ventures that will reliably repay their loans, banks are looking for businesses that are "home runs". |
| As financing and funding are difficult for new ventures, _______ is not a creative ways that start-ups can use to obtain financial resources: | an initial public offering. |
| Assume Dell provides some financial support to a small start-up firm that produces a key component used in their computers. This arrangement would best be characterized as: | a strategic partnership |
| T/F Typically, the seed money that gets a company off the ground comes from the founders' own pockets. | True |
| T/F Sweat equity relates to funding a new venture through the acquisition of gifts, free rent, and grants. | False |
| T/F Equity funding involves repayment. | False |
| T/F The primary disadvantage of equity funding is that the firm's owners relinquish part of their ownership interest and may lose some control. | True |
| T/F In terms of funding new firms, venture capitalists are far more prevalent than business angels. | False |
| T/F Raising capital by "going public" means to commercialize, or make your products available to the public, for the first time. | False |
| T/F An alternative to an initial public offering is a private placement, which is an issue of securities to a large institutional investor. | True |
| T/F Both interest payments to lenders, and dividend payments to stockholders, are tax deductible. | False |
| T/F One source of financing for new ventures is to borrow money directly from the Small Business Administration (SBA). | False |
| T/F An alternative to debt or equity financing that enables a company to acquire the use of equipment is leasing. | True |
| What are three reasons why most new ventures need to raise money during their early life. | CASH FLOW CHALLENGES, CAPITAL INVESTMENTS, LENGTHY PRODUCT DEVELOPMENT CYCLES |
| Describe CASH FLOW CHALLENGES: | As a firm grows, it requires an increasing amount of cash to fund operations and serve its customers, often before generating sufficient revenue and earning income. |
| Describe CAPITAL INVESTMENTS: | Firms often need to fund investments in property, equipment and other capital expenditures early on. |
| Describe LENGTHY PRODUCT DEVELOPMENT CYCLES: | In many industries firms need to pay substantial upfront costs before the anticipated payoff of the product is realized. |
| DEBT financing involves: | involves getting a loan, does not convey any ownership rights to lender, must be repaid with interest, interest is tax deductible |
| EQUITY financing involves: | partial ownership of the firm, typically in the form of stock, does not involve repayment, investors earn a return by selling their stock at a higher price than they paid (capital gain) and/or dividend payments, dividend payments not tax deductible |
| _____ is the limited group of potential customers a firm goes after or to which it tries to appeal. | Target market |
| Which marketing concept pertains primarily to how a firm differentiates itself from competitors? | establishing a unique position |
| Nike's "Just do it" is an example of ________. | a tagline |
| _____ is the set of assets and liabilities that are linked to a brand and enable it to raise a firm's valuation. | Brand equity |
| Which of the following is NOT one of the four P's? | Positioning |
| A mid-size Lexus might only cost 15% more to produce than other mid-sized cars but is priced significantly higher than other mid-sized cars. Which of the following is the pricing method used for Lexus? | value-based pricing |
| What is NOT considered a promotion tactic or activity? | Gaining the exclusive right to retail a company's products in a specific area for a specific period of time. |
| What is a major advantage of selling direct? | Being able to control the process of moving products from their place of origin to the end user instead of relying on third parties. |
| _____ give a retailer or other intermediary the exclusive rights to sell a company's products. | Exclusive distribution arrangements |
| T/F One way a computer company can consider the industry it participates in is to consider it comprised of school customers, business customers, government customers, and household customers; this is an example of market segmentation. | True |
| T/F The first step in selecting a target market is to establish a unique position that differentiates you from your competitors. | False |
| T/F New ventures are more likely to target an entire segment of a market because they lack the expertise to focus on a niche within the segment. | False |
| T/F It is generally more important for an entrepreneur to emphasize a product or service's features when trying to gain attention from the media. | false |
| T/F The product line mix is the set of controllable, tactical marketing tools a firm uses to produce the response it wants in the target market. | False |
| T/F A service is an activity or benefit that is intangible, doesn't take a physical form, and falls under the product "P" of the four Ps. | True |
| T/F Most experts encourage entrepreneurs to charge a low price for their products as a way to quickly capture market share. | False |
| T/F The Internet has brought about a major highly focused innovation in advertising known as pay-per-click advertising. | True |
| T/F Public relations, which are efforts to establish and maintain a company's image with the public, is emphasized by many start-ups because, relative to advertising, it is cheaper and helps build credibility. | True |
| T/F Decisions regarding a firm's distribution channels would fall under the promotion "P" of the four Ps. | False |
| what is a firm's target market | The target market is the limited group of individuals or businesses that a firm goes after or to which it tries to appeal. |
| the steps a firm goes through in selecting that target market. | 1-segment the market,2-select a target market that is sufficiently attractive and which the firm can serve well,3-establish a unique position that differentiates a firm from its competitors. |
| The four P’s are | Product, Price, Promotion, Place |
| The 4 P’s Product refers to | good or service offered, quality level, features, design, brand name, and packaging |
| The 4 P’s Price refers to | amount of money consumers pay, only element of the marketing mix that produces revenues; the other elements generate costs |
| The 4 P’s Promotion refers to | activities the firm takes to communicate the merits of its product to its target market, advertising, public relations, samples and trials, event sponsorship, viral marketing |
| The 4 P’s Place refers to | all the activities that move a firm's product from its place of origin to the consumer, can sell direct, or sell via intermediaries |
| _____ is a grant from the federal government conferring the rights to exclude others from making, selling, or using an invention for a certain term. | Patent |
| Which type of patent would be applicable to something like Amazon.com's one-click ordering system or Priceline.com "name-your-own-price" model of purchasing travel and accommodations? | business method patent |
| _____ is any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those products or services from others. | a trademark |
| Which form of intellectual property protection is granted to the owner of a work of authorship, and requires the work to be in tangible form? | copyright |
| Assume a firm's marketing VP leaves to become the marketing VP of a rival firm, and creates a marketing plan for the new firm that is virtually identical to one he was working on at the old firm. The old firm could argue that this is a ________. | trade secret dispute |
| The first step a firm should take to protect its intellectual property is to determine the intellectual property that it owns by ________. | conducting an intellectual property audit |
| T/F Although intellectual property has no value in the marketplace, it is important to firms because it is the result of human imagination and inventiveness. | False |
| T/F The loss to a business of intellectual property assets can be as costly as the loss of physical property like equipment and buildings. | True |
| T/F Owning the exclusive rights to something, even if no market for it exists, has tremendous value. | False |
| T/F Once an entrepreneur has obtained legal protection of their intellectual property, they should contact the police immediately if they observe any infringements or violations of their intellectual property rights. | False |
| T/F Patent protection has a long history; it was mentioned in the U.S. Constitution. | True |
| T/F Utility patents, the most common type of patent, have terms of 20 years from the date of application. | True |
| T/F Scandalous matter, such as profane language used by very creative stand-up comedians can be protected by trademark. | False |
| T/F The title of the textbooks for each of your classes is excluded from copyright protection. | True |
| T/F Bootleg or pirated DVDs and CDs are examples of copyright infringement. | true |
| List the steps involved in the process of obtaining a patent: | 1: Make sure the invention is practical. 2: Document when the invention was made. 3: Hire a patent attorney. 4: Conduct a patent search. 5: File a patent application. 6: Obtain a decision from the U.S. Patent and Trademark Office. |
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