MAN 320F: Exam 3 (100% Verified Solutions)

Annual sources of Start-up Funding correct answers Venture Capital: $18 billion State funds: $4 billion Angel Investors (wealthy individual): $35 billion Angels: 90% of outside equity of start-ups? The Three F's (Family, Friends, Fools): $60 billion Potential Angels in the U.S. correct answers U.S. Millionaires, Estimates of informal investors, Center for Venture Research-Active Angels, Investors in angel groups T/F: Angel investors are more likely to invest in a company that is a 2 hour drive away, they want a hands-on approach, want to do this "in their back yard". correct answers TRUE. Where do I get my money? correct answers Pension funds Insurance companies Endowments Foundations High net worth individuals Arorian's Track Record correct answers 40% of the deals fail 40% of my deals do okay- nothing great 20% of my deals make up for the 80% that don't really do all that well What is Venture Capital? correct answers o Equity investments made to fund the launch, or early development, or expansion of a private, and usually quite young, company. o Offsetting the high risk, the investor takes is the expectation of higher than average return on the investment. Who will a VC fund? correct answers An entrepreneur- someone who assumes the financial risk of beginning and managing a new venture. The venture can be based on a totally new idea, a new way of doing something, or attempting something no on eels has done before. What does a "perfect" investment opportunity look like? correct answers o An experienced management team o A great idea/concept that is proprietary o Something that cannot be duplicated o A product/service that 7 billion humans will buy o A great rate of return on investment o Intellectual property that is protected by patents and trademarks o Zero risk The Three Laws of Business correct answers It will always cost more than you thought it would It will always take longer than you anticipated