Equity Financing and Investment Quiz

What does equity financing involve?

• Using personal savings

• Taking a loan from a bank

• Borrowing from family

• Selling shares to investors

In the Cricket Flour example, what initial methods did the entrepreneur use to fund the business?

• Equity financing and grants

• Venture capital and angel investment

• Bootstrapping and debt financing

• Crowdfunding and donations

Why does the entrepreneur seek equity investors for the Cricket Flour business?

• To repay existing loans

• To invest in marketing

• To open a new bakery and hire staff

• To buy more cricket flour

What is a key difference between equity and debt financing?

• Debt financing involves selling shares

• Debt investors have control over business decisions

• Equity financing requires repayment with interest

• Equity investors gain ownership and profit share

If a business is sold for $100,000, how much would a 40% equity investor receive?

• $60,000

• $40,000

• $20,000

• $10,000