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Entrep 3
| Question | Answer |
|---|---|
| New Venture Team | group of founders, key employees, and advisers that move a venture from an idea to a fully functioning firm. |
| Attending entrepreneurship-focused workshops, speaker series, and entrepreneurship boot camps is a way to overcome what is referred to as the ________. | Liability of Newness |
| Which of the following is MOST suggested as a consistent predictor of future entrepreneurial performance? | Prior entrepreneurial experience. |
| Well-known and respected board members bring instant credibility to the firm; this phenomenon is referred to as ________. | Signaling |
| On average, how often do venture capitalists visit companies in which they have invested? | Rarely, because it is important to allow new firms to establish a sense of independence and autonomy. |
| SCORE | Comprised of retired businesspersons and women who provide free consulting services to small businesses |
| T/F Studies show that the majority of new ventures are started by more than one individual. | True |
| T/F It is generally believed that new ventures started by a team have an advantage over those started by an individual. | TRUE |
| T/F If a new venture organizes as a corporation, it is legally required to have a board of directors. | TRUE |
| T/F An outside director is an officer of the firm that is not an employee. | False |
| T/F Because the board members of large firms are more likely to be well-compensated executives of other firms, large firms do not typically pay their board members. | FALSE |
| T/F If a firm has a board of directors (because it is a corporation), it will not have an advisory board. | FALSE |
| T/F A lender with a well-secured loan may spend very little time with a client. | TRUE |
| T/F Investors are precluded by SEC regulations from having a seat on the board of directors. | FALSE |
| Liability of Newness | refers to the fact that companies often falter because the people who start the firms can’t adjust quickly enough to their new roles and because the firm lacks a “track record” with outside buyers and sellers. |
| Studies have shown that ___ to __%of all new ventures are started by more than one individual. | 50-70% |
| Outside Director | Someone who is not employed by the firm. |
| 3 Formal Responsibilities of Board of Directors | 1.) Appoint the officers of the firm. 2.) Declare dividends. 3.) Oversee the affairs of the corporation. |
| Most boards of directors meet ___ to ___times a year. | 3-4 |
| New ventures are more likely to pay their boards in ____ or ask them to serve on a _____ _____ rather than pay a cash honorarium. | company stock, voluntary basis |
| Unlike a board of directors, an advisory board possesses | no legal responsibility for the firm and gives nonbinding advice. |
| Most new ventures need to raise money during their early life for the following reasons EXCEPT: | To pay dividends |
| Burn rate | Rate at which a company is spending its capital until it reaches profitability. |
| Least likely source of the money that gets a new venture started | Bank Line of Credit |
| Elevator Speech | Carefully constructed statement that outlines the merits of a business opportunity. |
| NOT a common source of equity funding for startups | Banks |
| Entrepreneurs take their firms public for the following reasons EXCEPT: | Broaden their ownership interest |
| NOT a common source of debt financing for a new venture? | Corporate Bonds |
| he following are reasons that commercial banks have not been viewed as practical sources of financing for new ventures EXCEPT: | Unlike venture capitalists who look for ventures that will reliably repay their loans, banks are looking for businesses that are "home runs". |
| As financing and funding are difficult for new ventures, the following are creative ways that start-ups can use to obtain financial resources EXCEPT: | an initial public offering. |
| T/F Equity funding involves repayment. | FALSE |
| T/F In terms of funding new firms, venture capitalists are far more prevalent than business angels. | FALSE |
| an issue of securities to a large institutional investor. | Private Placement |
| T/F Both interest payments to lenders, and dividend payments to stockholders, are tax deductible. | FALSE |
| T/F One source of financing for new ventures is to borrow money directly from the Small Business Administration (SBA). | False |
| Three Reasons Start-Ups Need Funding | 1.) Cash Flow Challenges 2.) Capital Investments 3.) Lengthy Product Development Cycles |
| Bootstrapping | Finding ways to avoid the need for external financing or funding through creativity, ingenuity, thriftiness, cost-cutting, or any means necessary. (Many firms do this out of NECESSITY) |
| Debt Financing | Getting a loan. The most common sources of debt financing are commercial banks and the Small Business Administration (through its guaranteed loan program). |
| Equity Financing | Exchanging partial ownership in a firm, usually in the form of stock, for funding. Angel investors, private placement, venture capital, and initial public offerings are the most common sources of equity funding. |
| The number of angel investors in the U.S. has _______ dramatically over the past decade. | INCREASED |
| Venture-capital firms fund _____ ____ entrepreneurial firms in comparison to business angels. | very few |
| Venture capitalists are looking for the ___ ____ and so reject the majority of the proposals they consider. | “home run” |
| SBIR Program | Competitive grant program that provides over $1 billion per year to small businesses in early-stage and development projects. |
| The Eddie Bauer Ford Explorer SUV, and Crest Plus Scope Toothpaste, are examples of which of the following: | Cobranding |
| A mid-size Lexus might only cost 15% more to produce than other mid-sized cars but is priced significantly higher than other mid-sized cars. What is the pricing method used for Lexus? | Value-based pricing. |
| When Kalen's site takes an order for a Mattel toy, he transmits the order to Mattel, and the product is shipped by Mattel to the customer in a Kalen's Kidstuff box. This is called: | Drop Shipping |
| T/F The first step in selecting a target market is to establish a unique position that differentiates you from your competitors. | FALSE |
| T/F New ventures are more likely to target an entire segment of a market because they lack the expertise to focus on a niche within the segment. | FALSE |
| T/F The Internet has brought about a major highly focused innovation in advertising known as pay-per-click advertising. | TRUE |
| T/F Decisions regarding a firm's marketing channels would fall under the promotion "P" of the four Ps. | FALSE |
| 3 Step Process of Selecting a Target Market and Positioning Strategy | 1.) Segment the Market 2.) Select a Target Market 3.) Create a UNIQUE POSITIONING STRATEGY |
| Market Segmentation | The first step in selecting a target market is to study a firm’s industry and determine the different potential target markets in that industry. |
| Firms often develop a _____ to reinforce the position they have staked out in their market | “tagline” |
| Core Product | Product itself, such as a CD that contains an antivirus program. |
| Refers to the activities the firm takes to communicate the merits of its product to its target market. | Promotion |
| AdWords | Allows advertisers to buy keywords on the Google Home Page. Triggers text-based ads to the side (and sometimes above) search results when the keyword is used. |
| AdSense | Allows advertisers to buy ads that will be shown on other Web sites instead of Google’s Home Page. Google selects sites of interest to the advertiser’s customers. |
| One of the most cost-effective ways to increase the awareness of the products of a company is through | Public Relations |
| Place | Place, or distribution, encompasses all the activities that move a firm’s product from its place of origin to the consumer. |
| Secret recipe for the apple pie that has been passed down through your family for several generations. Intellectual Property? | NO |
| grant from the federal government conferring the rights to exclude others from making, selling, or using an invention for a certain term. | Patent |
| Which type of patent would be applicable to something like Amazon.com's one-click ordering system or Priceline.com "name-your-own-price" model of purchasing travel and accommodations? | Business method patent. |
| any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those products or services from others. | Trademark |
| form of intellectual property protection is granted to the owner of a work of authorship, and requires the work to be in tangible form. | Copyright |
| Assume a firm's marketing VP leaves to become the marketing VP of a rival firm, and creates a marketing plan for the new firm that is virtually identical to one he was working on at the old firm. The old firm could argue that this is a ________. | trade secret dispute |
| T/F Although intellectual property has no value in the marketplace, it is important to firms because it is the result of human imagination and inventiveness. | FALSE |
| T/F Patent protection has a long history; it was mentioned in the U.S. Constitution. | TRUE |
| T/F Utility patents, the most common type of patent, have terms of 20 years from the date of application. | TRUE |
| T/F An employee's memory of specified information cannot be protected from unauthorized disclosure; the information must be written, recorded, or saved to a computer file. | FALSE |
| Intellectual Property | Is any product of human intellect that is intangible but has value in the marketplace. |
| There is ______ interest in patents. | INCREASING |
| 3 Basic Requirements for Patent | Useful, Novel, Not Obvious |
| Design Patent | 14 Years; Invention of new, original, and ornamental designs for manufactured products |
| Utility Patent | 20 Years; New or useful process, machine, manufacture, or composition of material or any new and useful improvement thereof |
| Plant Patent | 20 Years; Any new varieties of plants that can be reproduced asexually |
| Collective Mark | Trademarks or service marks used by the members of a cooperative, association, or other collective group. |
| Certification Mark | Marks, words, names, symbols, or devices used by a person other than its owner to certify a particular quality about a good or service. |
| Idea-Expression Dichotomy | The main exclusion is that copyright laws CANNOT PROTECT IDEAS For example, an entrepreneur may have the idea to open a soccer-themed restaurant. The idea itself is not eligible for copyright protection. |
| Video game manufacturer spends substantial amount to develop new game. after development, per-unit cost of duplicating and distributing the game is very low, ->profit margin increases as more and more copies are sold. This is an example of ________. | Executing a Scalable Business Model |
| T/F Even though revenues and market share are expanding rapidly, growth companies can encounter difficult challenges, and even fail. | TRUE |
| T/F Spontaneity and risk-taking OVER deliberateness and being constrained by mission and values statements Can Lead to Growth | FALSE |
| Genuine Scooter's founder said: "I always wanted to grow . . . but there is no way we . . . want to compete with the Hondas or Yamahas. We look to compete on a scale that focuses on niche,service, and quality." This statement is reflective of ________. | business growth planning |
| T/F 2 kinds of services r part of a firm's administrative framework and are important to its growth: entrepreneurial services facilitate the profitable execution of new opportunities and management services generate new market, product, and service ideas. | FALSE |
| When a firm's managerial resources are insufficient to take advantage of its new product and services opportunities, the subsequent bottleneck is referred to as | The MANAGERIAL CAPACITY PROBLEM |
| T/F One advantage of growth is that growth usually decreases the challenges involved with cash flow management because of the increase in sales. | FALSE |
| T/F The consensus view is that participating in joint ventures and strategic alliances can hamper a firm's growth due to the requirement to share revenues and earnings with business partners. | FALSE |
| Economies of Scope | Economics of scope are similar to economies of scale, expect the advantage comes through the scope (or range) of a firm’s operations rather then from its scale of production. |
| Internally generated growth is often called ________. | Organic Growth |
| International expansion is a common form of growth for entrepreneurial firms because outside of the U.S. the percent of the world's population and percent of its total purchasing power are, respectively ________. | 95% and 67% |
| Strategic Alliance | Tends to be less formal and does not involve the creation of a new entity |
| T/F Disney allowing a clothing company to put an image of Mickey Mouse on a shirt is an example of franchising. | FALSE; Licensing |
| An arrangement whereby a firm with the proprietary rights to a product grants permission to another firm to manufacture that product for specified royalties or other payments. | Licensing |
| A contractor from one country builds a facility in another country, trains the personnel that will operate the facility, and turns over the keys to the project when it is completed and ready to operate. | Turnkey Project |
| A company that has made the decision to manufacture a product in a foreign country and establish a permanent presence | Wholly Owned Subsidiary |
| Merger | Pooling of interests to combine two or more firms into one. |
| 3 Purposes of Acquisitions | 1.) Expanding its product line. 2.) Gaining access to distribution channels. 3.) Achieving competitive economies of scale. |
| Strategic Alliance | Tend to be informal and do not involve the creation of a new entity. |
| Scale Joint Venture | In a scale joint venture, the partners collaborate at a single point in the value chain to gain economies of scale in production or distribution. This type of joint venture can be a good vehicle for developing new products or services. |
| Link Joint Venture | In a link joint venture, the position of the parties is not symmetrical, and the objectives of the partners may diverge. For example, many of the joint ventures between food companies provide one partner access to distribution channels and the other partn |
Created by:
derekabc123