Financing Your Venture Quiz

Which of the following contrasts two types of investors based on their involvement in business operations?

• Risk vs. Venture Capital

• Internal vs. External Funding

• Debt vs. Equity

• Active vs. Passive Investors

What is the term used to differentiate financing based on the source of funds being inside or outside the company?

• Risk vs. Venture Capital

• Internal vs. External Funding

• Debt vs. Equity

• Informal vs. Formal Investors

Which pair of terms describes the difference between financing through borrowing versus selling ownership stakes?

• Risk vs. Venture Capital

• Internal vs. External Funding

• Debt vs. Equity

• Active vs. Passive Investors

What type of capital is typically provided by self, family & friends, and angel investors before a start-up has significant sales?

• Venture Capital

• Seed Capital

• Commercial Bank Loans

• Public Offerings

At what stage do venture capitalists usually provide growth money?

• Prior to the start-up phase

• After achieving a foothold in the market

• Before the company has any growth potential

• After the company goes public

Which of the following is NOT a source of venture capital?

• Angel Investors

• Commercial Banks

• Public Offerings

• Venture Capitalists

Which of the following is a method of internal funding for a business?

• Issuing bonds

• Extending payables

• Obtaining a bank loan

• Selling shares

What does external funding typically consist of?

• Reinvesting income

• Debt and/or equity

• Shortening receivables

• Selling assets

What is factoring in the context of internal funding?

• Taking out a mortgage

• Selling receivables

• Investing in stocks

• Purchasing bonds

What does debt financing typically involve?

• Variable payments for an indefinite period

• Fixed payments for a fixed period

• Giving up a portion of ownership

• Receiving dividends