Concept Check!

Entrepreneurial finance is the application and adaptation of financial tools and techniques to the planning, funding, operations, and valuation of an entrepreneurial venture.

• TRUE

• FALSE

A viable venture opportunity creates or meets a customer need, provides an initial competitive advantage, is timely in terms of time-to-market, and offers the expectation of added value to investors.

• FALSE

• TRUE

Patents that cover most inventions pertaining to new products, services, and processes are referred to as:

• design patents

• plant patents

• utility patents

• mechanical patents

Which of the following is not considered to be an internal operating schedule?

              

• inventories schedule

• cost of goods sold schedule

• income statement

• cost of production schedule

The acquisition of production assets (e.g., inventories and equipment to produce products and give credit to customers) usually occurs during the development stage in a new venture's life cycle.

• TRUE

• FALSE

Which of the following are intellectual property rights in the form of inventions and information, such as formulas, processes, and customer lists, that are not generally known to others and that convey economic advantages to the holders?

• patents

• trademarks

• copyrights

• trade secrets

A low asset intensity implies a large investment in fixed assets and/or net working capital is needed to support revenue growth.

• False

• True

Lifestyle firms are growth driven in terms of revenues, profits, and cash flows and also performance oriented as reflected in rapid value creation over time.

• True

• False

In the venture life cycle, moving from the development stage to the startup stage frequently begins with the preparation of a business plan. The business plan is a written document that describes the proposed venture in all of the following terms EXCEPT:

• the proposed product or service opportunity

• financial projections

• the accounting data for the last five years

• current resources available to the venture

Three of the major megatrends discussed in Chapter 1 include: societal trends or changes, demographic trends or changes, and technological trends or changes.

• True

• False