Entrepreneurship Financing

The three primary reasons startups need funding are ________.

• cash flow challenges, capital investments, and lengthy product development cycles

• business research, cash flow challenges, and costs associated with building a brand

• bonuses for members of the new venture team, attorney fees, and lengthy product development cycles

• attorney fees, capital investments, and marketing research

In startup firms, inventory must be purchased, employees must be trained and paid, and advertising must be paid for before cash is generated from sales. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

• Cash flow challenges

• Marketing cost

• Personnel cost

• Capital investments

For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?

• Lengthy product development cycles

• Costs associated with building a brand

• Cash flow challenges

• Capital investments

Peter Simmons owns a specialized computer software company. Although Peter's software designers and programmers are very good, it takes 2-3 years to develop a good software product. This example illustrates the need for funding or financing referred to as ________.

• personnel costs

• marekting cost

• costs associated with building a brand

• lengthy product development cycles

Beyond their own funds, the second source of funds for many new ventures is ________.

• government grants

• business angels

• friends and families

• banks

Amy Clark just opened a soup and salad restaurant near Golden Gate Park in San Francisco, CA. Rather than borrow money or raise funds from investors, Amy used her creativity and ingenuity and figured out how to get her business up and running without the need for external funding. Amy is utilizing a technique referred to as ________.

• networking

• reaching

• prospecting

• bootsrapping

Equity financing (or funding) means ________.

• exchanging partial ownership in a firm, usually in the form of stock, for funding

• getting a grant or outright gift

• getting a loan

• getting a lease

Carefully constructed statement that outlines the merits of a business opportunity is called a(n) ________ speech.

• subway

• sway

• bootstrap

• elevator

________ are individuals who invest their personal capital directly in start-ups.

• Venture capitals

• Business angels

• Institutional investors

• Business capitalists

Debt financing involves ________.

• raising venture capital or securing a private placement

• selling corporate bonds or selling stock via an IPO

• getting a grant or selling corporate bonds

• getting a loan or selling corporate bonds