Entrepreneurial Finance

The personal finances of the nascent entrepreneur and the finances of the start-up venture he creates are inextricably linked. One of the reasons this is true is because most new ventures are founded as _____.

• Pass through entities

• Virtual entities

• corporations

• non-profits

There are two major causes of business failure that, with some effort on the part of the entrepreneur, are in many cases, avoidable. They are:

• poor timing and lack of proper preparation

• inability to find needed talent and currency fluctuations

• lack of resources and fierce industry competition

• ineffective business partners and economic downturns

Working capital is

• equal to current assets divided by current liabilities

• The capital required to sustain operations and support business growth after a company's start up phase.

• when a customer uses a credit card to buy something and then cancels the transaction

• a fund that invests in a basket of assets, such as stocks or bonds and trades on a regulated exchange like the NYSE

The topic of entrepreneurial finance recognizes that oftentimes entrepreneurs make decisions for the businesses they've founded with their personal financial goals clearly in mind.

• True

• False

A pass through entity is a business whose profits are not taxed at the company level but instead pass through to the business owner's individual tax returns, where they are taxed.

• True

• False

Before starting a business, in order to increase his chances for entrepreneurial success, the aspiring entrepreneur should:

• quit his job

• work in and learn about the industry in which he intends to start the business

• prepare a will

• isolate himself from distractions like friends and family

A company's business model indicates how a business concept will make a company- and ultimately the entrepreneur money

• True

• False

A business plan should not be shown to individuals outside of the organization

• True

• False

A feasibility analysis:

• should never be shown to potential investors

• concentrates on assessing the likelihood of economic success of business

• should never be over 20 pages long

• should be performed immediately after a business has commenced operations

____ financial statements are financial statements that attempt to estimate the future financial situation of a company based upon certain identified assumptions.

• traditional

• pro forma

• historical

• comparative