Mgmt 160 Final
1. Angel Investors Angel investors are individuals, or groups of
individuals, who invest their own money in
Who are angel investors? startup ventures. They are different from VC
Give some characteristics investors because of their use of personal
and discuss their motiva- rather than professionally raised and man-
tions, etc. (4 points) aged funds. They tend to have smaller portfo-
lios and seek lower investment amounts and
projects that have less aggressive growth tar-
gets. They can provide connections to cus-
tomers, industry knowledge, or act as an ad-
visor to companies.
2. Basic Accounting Principles 1. Business Entity - Financial statements that
(12) are prepared for a business entity that is sep-
arate and distinct from its owners
The article discusses 12
basic accounting concepts 2. Going Concern - Unless evidence sug-
and assumptions that any- gests otherwise, it is assumed the entity will
one interested in financial continue operations into the foreseeable fu-
statements need to under- ture
stand. Excluding the "Dual
Aspect", list FOUR of the 3. Monetary unit - Accounting is a measure-
other 11 and describe in a ment process that deals only with events that
sentence or two. (8 points) can be measured in monetary terms.
4. Historical cost - Nonmonetary and mone-
tary assets are ordinarily initially recorded at
their acquisition price.
5. Accounting period - Accounting measures
activities for a specific interval of time, called
the accounting period.
6. Consistency - Similar transactions are re-
ported in a consistent fashion.
7. Matching - Accounting profit is the net re-
sult of matching related costs and revenues.
, Mgmt 160 Final
8. Dual aspect - Every transaction affects at
least 2 items in the basic accounting equation
9. Reliability of evidence - Accountants
recording events rely as much as possible on
objective, verifiable documentary evidence.
10. Disclosure - Accounting reports should
disclose enough information that they will not
mislead careful readers reasonably well in-
formed in financial matters
11. Materiality - Accounting standards apply
only to significant items
12. Conservatism - A degree of professional
skepticism should be adopted when assess-
ing the prospects that incomplete transac-
tions will be concluded successfully.
3. Bootstrapping Bootstrapping utilizes quick cash flow & per-
sonal resources while retaining full owner-
What does the term "boot- ship over the company. It limits pace of
strapping" when referring to growth, excess spending, and chasing too
a startup? (3 points) many ideas/products.
4. Business Model A "business model" describes the rationale
of how an organization creates, delivers, and
According to Osterwalder & captures value.
Pigneur, what is the defini-
tion of a "business model"
5. Business Plan document that articulates the proposed ven-
ture's business model and provides signifi-
Definition cant detail
6. Business Plan Types The plans used for external stakeholders are
mini business plans and traditional business
According to the article, plans. A mini-business plan is a document
what are the four common that summarizes the most important com-
, Mgmt 160 Final
types of business plans? ponents of a new venture's go to market
Briefly define each in a sen- and operating plans and how these plans
tence or two, and discuss if relate to financial predictions. A tradition-
the plan type is for exter- al business plan is a detailed document
nal stakeholders or internal that notes a venture's concept, market ap-
stakeholders. (6 points) proach, financial plan, team, and operating
plan. The plans used for internal stakehold-
ers are go-to-market plans and operating
plans. The go-to-market plan describes the
unmet needs the venture will address for
early customers, value proposition and the
benefits the venture aims to provide.
7. Change in Business Plans Detailed business plans are much less com-
mon now because mini-plans and pitch
According to the article, has decks that enable more efficient, rapid ex-
the prevalence of full-length change of information between entrepre-
business plans changed? If neurs and targeted stakeholders have re-
so, why and what has re- placed them.
placed them? (3 points)
8. Convertible preferred stock Convertible preferred stock is a form of stock
that can be redeemed at face value of the
What is "convertible pre- investment (with any accumulated dividends)
ferred stock"? In other or converted into common stock to get a
words, how does convertible pre-negotiated share of the company.
preferred stock differ from
common stock? (3 points)
9. Core financial implications The three core financial implications of the
of the business model (3) business model are underlying profitability,
asset intensity, and pace of growth. The un-
The article discusses three derlying profitability details the value of out-
core financial implications put vs. the cost of input. Asset intensity is the
of the business model. What amount of assets tied up in the business in
are the three core finan- order to generate sales. Pace of growth is the
cial implications, and ex- speed at which a company needs to grow.
, Mgmt 160 Final
plain each in a sentence or
two. (6 points)
10. Core Financial Statements The three core financial statements are bal-
(3) ance sheets, income statements, and state-
ments of cash flow. The balance sheet de-
What are the three core fi- picts a company's financial position at a point
nancial statements? Briefly in time by reporting its assets, liabilities,
define the purpose of each and stockholders' equity. Income statements
statement (i.e. what is the show the results of the company's operating
gist of each statement). Indi- activities for a specific period of time. The
cate for each statement if it is statement of cash flow shows where the firm
for a point in time or a period generates cash and where it spends cash for
of time. Hint: "The Statement a period of time.
of Changes in Shareholders
Equity" and "The Footnotes"
are NOT one of the three
core financial statements! (6
points)
11. Crowdfunding The goal of crowdfunding is to enable compa-
nies to raise funds from individual investors
What is crowdfunding? (2 online.
points)
12. Crowdfunding benefits o *Validates the business idea
o *Product validation
The article discusses five o *Market validation
benefits of crowdfunding for o Marketing
startups. Please list three of o Establishing a loyal community of cus-
them. (3 points) tomers
13. Crowdfunding for each Pre-startup: Donation crowdfunding
stage Startup: Lending crowdfunding
Growth: Equity crowdfunding
The article discusses a
framework for startup
crowdfunding. The frame-
work breaks the startup
stage into three phases:
1. Angel Investors Angel investors are individuals, or groups of
individuals, who invest their own money in
Who are angel investors? startup ventures. They are different from VC
Give some characteristics investors because of their use of personal
and discuss their motiva- rather than professionally raised and man-
tions, etc. (4 points) aged funds. They tend to have smaller portfo-
lios and seek lower investment amounts and
projects that have less aggressive growth tar-
gets. They can provide connections to cus-
tomers, industry knowledge, or act as an ad-
visor to companies.
2. Basic Accounting Principles 1. Business Entity - Financial statements that
(12) are prepared for a business entity that is sep-
arate and distinct from its owners
The article discusses 12
basic accounting concepts 2. Going Concern - Unless evidence sug-
and assumptions that any- gests otherwise, it is assumed the entity will
one interested in financial continue operations into the foreseeable fu-
statements need to under- ture
stand. Excluding the "Dual
Aspect", list FOUR of the 3. Monetary unit - Accounting is a measure-
other 11 and describe in a ment process that deals only with events that
sentence or two. (8 points) can be measured in monetary terms.
4. Historical cost - Nonmonetary and mone-
tary assets are ordinarily initially recorded at
their acquisition price.
5. Accounting period - Accounting measures
activities for a specific interval of time, called
the accounting period.
6. Consistency - Similar transactions are re-
ported in a consistent fashion.
7. Matching - Accounting profit is the net re-
sult of matching related costs and revenues.
, Mgmt 160 Final
8. Dual aspect - Every transaction affects at
least 2 items in the basic accounting equation
9. Reliability of evidence - Accountants
recording events rely as much as possible on
objective, verifiable documentary evidence.
10. Disclosure - Accounting reports should
disclose enough information that they will not
mislead careful readers reasonably well in-
formed in financial matters
11. Materiality - Accounting standards apply
only to significant items
12. Conservatism - A degree of professional
skepticism should be adopted when assess-
ing the prospects that incomplete transac-
tions will be concluded successfully.
3. Bootstrapping Bootstrapping utilizes quick cash flow & per-
sonal resources while retaining full owner-
What does the term "boot- ship over the company. It limits pace of
strapping" when referring to growth, excess spending, and chasing too
a startup? (3 points) many ideas/products.
4. Business Model A "business model" describes the rationale
of how an organization creates, delivers, and
According to Osterwalder & captures value.
Pigneur, what is the defini-
tion of a "business model"
5. Business Plan document that articulates the proposed ven-
ture's business model and provides signifi-
Definition cant detail
6. Business Plan Types The plans used for external stakeholders are
mini business plans and traditional business
According to the article, plans. A mini-business plan is a document
what are the four common that summarizes the most important com-
, Mgmt 160 Final
types of business plans? ponents of a new venture's go to market
Briefly define each in a sen- and operating plans and how these plans
tence or two, and discuss if relate to financial predictions. A tradition-
the plan type is for exter- al business plan is a detailed document
nal stakeholders or internal that notes a venture's concept, market ap-
stakeholders. (6 points) proach, financial plan, team, and operating
plan. The plans used for internal stakehold-
ers are go-to-market plans and operating
plans. The go-to-market plan describes the
unmet needs the venture will address for
early customers, value proposition and the
benefits the venture aims to provide.
7. Change in Business Plans Detailed business plans are much less com-
mon now because mini-plans and pitch
According to the article, has decks that enable more efficient, rapid ex-
the prevalence of full-length change of information between entrepre-
business plans changed? If neurs and targeted stakeholders have re-
so, why and what has re- placed them.
placed them? (3 points)
8. Convertible preferred stock Convertible preferred stock is a form of stock
that can be redeemed at face value of the
What is "convertible pre- investment (with any accumulated dividends)
ferred stock"? In other or converted into common stock to get a
words, how does convertible pre-negotiated share of the company.
preferred stock differ from
common stock? (3 points)
9. Core financial implications The three core financial implications of the
of the business model (3) business model are underlying profitability,
asset intensity, and pace of growth. The un-
The article discusses three derlying profitability details the value of out-
core financial implications put vs. the cost of input. Asset intensity is the
of the business model. What amount of assets tied up in the business in
are the three core finan- order to generate sales. Pace of growth is the
cial implications, and ex- speed at which a company needs to grow.
, Mgmt 160 Final
plain each in a sentence or
two. (6 points)
10. Core Financial Statements The three core financial statements are bal-
(3) ance sheets, income statements, and state-
ments of cash flow. The balance sheet de-
What are the three core fi- picts a company's financial position at a point
nancial statements? Briefly in time by reporting its assets, liabilities,
define the purpose of each and stockholders' equity. Income statements
statement (i.e. what is the show the results of the company's operating
gist of each statement). Indi- activities for a specific period of time. The
cate for each statement if it is statement of cash flow shows where the firm
for a point in time or a period generates cash and where it spends cash for
of time. Hint: "The Statement a period of time.
of Changes in Shareholders
Equity" and "The Footnotes"
are NOT one of the three
core financial statements! (6
points)
11. Crowdfunding The goal of crowdfunding is to enable compa-
nies to raise funds from individual investors
What is crowdfunding? (2 online.
points)
12. Crowdfunding benefits o *Validates the business idea
o *Product validation
The article discusses five o *Market validation
benefits of crowdfunding for o Marketing
startups. Please list three of o Establishing a loyal community of cus-
them. (3 points) tomers
13. Crowdfunding for each Pre-startup: Donation crowdfunding
stage Startup: Lending crowdfunding
Growth: Equity crowdfunding
The article discusses a
framework for startup
crowdfunding. The frame-
work breaks the startup
stage into three phases:
