BC07_Small Biz

Wendy quit her job as the regional manager of Rubicon Inc., a multinational company, and started her own fashion boutique. Within two years, she began earning more than what she earned during her tenure at Rubicon. Which of the following advantages of entrepreneurship is highlighted in the given scenario?

• survivial

• greater flexibility

• independence

• greater financial success

The primary reason people choose to become entrepreneurs is to:

• avoid difficult challenges.

• avoid uncertainty.

• earn more money.

• develop evolutionary business models.

Richard, an employee in an investment firm, was dissatisfied with the way his superiors handled business dealings. For that reason, he quit his job and started his own business so that he is able to make all management decisions without interference from anyone. Which advantage of entrepreneurship is highlighted in the given scenario?

• Greater financial success

• Independence

• Uniformity

• Greater challenge

Technological tools such as the Internet and email have:

• decreased the importance of entrepreneurship in the national economy.

• made it easy for small business owners to manage their firms on the go.

• made it harder for small businesses to compete against large businesses.

• increased the number of legal regulations that small businesses should comply with.

Mabel has a business idea of starting a store that would only sell hair products. Although she needs to raise capital to start her business, she does not want to share the ownership of her firm with anyone else. With a good appetite for risk, which of the following financing resources would be most ideal for her to start her business?

• Personal credit cards

• Angel investors

• Venture capital firms

• Microloan program from the SBA

Small business start-ups are likely to find that getting commercial loans are:

• difficult because lenders are reluctant to give loans to firms that do not have a track record.

• one of the most flexible ways of obtaining financing because local bankers are usually eager to establish relationships with new companies.

• the most difficult because start-ups require higher financing than what banks can offer.

• the best way to obtain all the financing they need as lenders usually get an ownership stake in the companies.

In the context of funding options for small businesses, the _____ assists entrepreneurs by partially guaranteeing loans from local commercial lenders.

• Federal Reserve

• Patent and Trademark Office

• U.S. Small Business Administration

• Department of the Treasury

Maurice wants to make a documentary film on the unequal distribution of money in the world and its effect on different social classes. Instead of approaching a production house, he creates a website for the project where he pitches his idea through a short video and requests the viewers to donate any amount of money to cover the production cost. In the given scenario, which of the following is Maurice using to get the capital for his film?

• A venture capital firm

• An angel investor

• Crowdfunding

• Seed money

In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?

• Angel investors fund only nonprofits, whereas venture capital firms do not fund nonprofits.

• Angel investors include private organizations, whereas venture capital firms include only government organizations.

• Angel investors focus on start-ups in their later stages, whereas venture capital firms focus on low-potential start-ups.

• Angel investors are wealthy individuals, whereas venture capital firms are companies

Identify a true statement about angel investors.

• They are wealthy companies that invest in start-up businesses with high growth potential.

• They invest in start-up businesses without requiring a share of ownership.

• They look for companies that have previously demonstrated 5% to 10% per year since their start up.

• They invest in promising start-up companies because they want to make money.