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nh nh nh nh nh nh nh nh nh nh
SOLUTION MANUAL For Entrepreneurial Finance, 7th Edition
nh nh nh nh nh nh
nh by J. Chris Leach, Ronald W. Melicher, Chapters 1 - 16,
nh nh nh nh nh nh nh nh nh nh nh
nh Complete With CAPSTONE CASESnh nh nh n h
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TABLE OF CONTENTS n h nh
Part 1: THE ENTREPRENEURIAL ENVIRONMENT.
n h n h n h n h
1. Introduction n h to
Finance for Entrepreneurs. n h n h
2. Developing the Business Idea. n h n h n h
Part 2: ORGANIZING AND OPERATING THE VENTURE.
n h n h n h n h n h n h
3. Organizing and Financing a New Venture. n h n h n h n h n h
4. Preparing and Using Financial Statements. n h n h n h n h
5. Evaluating Operating and Financial n h n h n h
n h Performance. Part 3: PLANNING FOR THE nh n h n h n h n h
nh FUTURE.
6. Managing Cash Flow. n h n h
7. Types and Costs of Financial Capital. n h n h n h n h n h
8. Securities Law Considerations When Obtaining Venture n h n h n h n h n h
n h Financing. Part 4: CREATING AND RECOGNIZING VENTURE nh n h n h n h n h n h
n h VALUE.
9. Projecting Financial Statements. n h n h
10. Valuing Early-Stage Ventures. n h n h
11. Venture Capital Valuation Methods. n h n h n h
Part 5: STRUCTURING FINANCING FOR THE GROWING VENTURE.
n h n h n h n h n h n h n h
12. Professional Venture Capital. n h n h
13. Other Financing Alternatives. n h n h
14. Security Structures and Determining Enterprise n h n h n h n h
n h Values. Part 6: EXIT AND TURNAROUND STRATEGIES.
nh n h n h n h n h n h
15. Harvesting the Business Venture Investment. n h n h n h n h
16. Financially Troubled Ventures: Turnaround n h n h n h
n h Opportunities? Part 7: CAPSTONE CASES. nh n h nh n h
Case 1. Eco-Products, Inc.
n h n h n h
nhCase 2. Spatial Technology,
n h n h n h
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Chapter 1 nh
INTRODUCTION TO FINANCE FOR n h n h n h
n h ENTREPRENEURS FOCUS nh
The purpose of this first chapter is to present an overview of what entrepreneurial finance is
n h nh n h nh nh nh nh nh nh nh nh nh nh n h nh
about. In doing so we hope to convey to you the importance of understanding and applying
nh nh nh nh nh nh n h nh nh nh nh nh nh nh nh nh
entrepreneurial finance methods and tools to help ensure an entrepreneurial venture is
nh nh nh nh nh nh nh nh nh nh nh nh
successful. We present a life cycle approach to the teaching of entrepreneurial finance where
nh nh nh nh nh nh nh nh nh nh nh nh nh nh
we cover venture operating and financial decisions faced by the entrepreneur as a venture
nh nh nh nh nh nh nh nh nh nh nh nh nh nh
progresses from an idea through to harvesting the venture.
nh nh nh nh nh n h nh nh nh
LEARNING OBJECTIVES n h
LO 1.1: Characterize the entrepreneurial process.
nh nh nh nh nh
LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs.
nh nh n h nh n h n h nh n h
LO 1.3: Indicate several megatrends providing waves of entrepreneurial
n h n h n h nh nh n h n h nh
opportunities. LO 1.4: List and describe the seven principles of entrepreneurial
n h nh nh n h nh nh nh nh nh nh nh
finance.
nh
LO 1.5: Discuss entrepreneurial finance and the role of the financial
nh nh nh nh nh nh nh nh nh nh
manager. LO 1.6: Describe the various stages of a successful venture‗s life
nh nh nh nh nh nh nh nh nh nh nh nh
cycle.
nh
LO 1.7: Identify, by life cycle stage, the relevant types of financing and
nh nh nh nh nh nh nh nh nh nh nh nh
investors. LO 1.8: Understand the life cycle approach used in this book.
nh nh nh nh nh nh nh nh nh nh nh nh
CHAPTER OUTLINE n h
16.1 THE ENTREPRENEURIAL PROCESS n h n h
16.2 ENTREPRENEURSHIP FUNDAMENTALS n h
A. Who is an Entrepreneur? nh nh nh
B. Basic Definitions n h
C. Entrepreneurial Traits or Characteristics nh nh nh
D. Opportunities Exist But Not Without Risks n h n h nh n h nh
16.3SOURCES OF ENTREPRENEURIAL OPPORTUNITIES n h n h n h
A. Societal Changes nh
B. Demographic Changes n h
C. Technological Changes nh
D. Emerging Economies and Global Changes n h n h n h n h
E. Crises and ―Bubbles‖ nh n h
F. Disruptive Innovation n h
1
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16.4 PRINCIPLES OF ENTREPRENEURIAL FINANCE n h n h n h
A. Real, Human, and Financial Capital must be Rented from Owners (Principle #1)
n h n h n h n h n h n h n h n h n h n h n h
B. Risk and Expected Reward go Hand in Hand (Principle #2)
nh nh n h nh n h nh nh n h nh
C. While Accounting is the Language of Business, Cash is the Currency (Principle #3)
n h n h n h n h n h n h n h n h n h n h n h n h
D. New Venture Financing Involves Search, Negotiation, and Privacy (Principle #4)
n h n h n h n h n h n h n h n h n h
E. A Venture‗s Financial Objective is to Increase Value (Principle #5)
n h n h n h n h n h n h n h n h n h
F. It is Dangerous to Assume that People Act Against Their Own Self-
nh nh n h nh n h nh n h n h nh nh nh
Interests (Principle #6) nh n h
G. Venture Character and Reputation can be Assets or Liabilities (Principle #7)
nh nh nh nh nh nh nh nh nh nh
16.5 ROLE OF ENTREPRENEURIAL FINANCE nh nh nh
16.6 THE SUCCESSFUL VENTURE LIFE CYCLE
n h n h n h n h
A. Development Stage n h
B. Startup Stage n h
C. Survival Stage n h
D. Rapid-Growth Stage n h
E. Early-Maturity Stage nh
F. Life Cycle Stages and the Entrepreneurial Process
n h n h n h n h n h n h
16.7 FINANCING THROUGH THE VENTURE LIFE CYCLE n h n h n h n h n h
A. Seed Financing n h
B. Startup Financing n h
C. First-Round Financing n h
D. Second-Round Financing n h
E. Mezzanine Financing n h
F. Liquidity-Stage Financing n h
G. Seasoned Financing nh
16.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCE
nh nh nh nh nh nh
SUMMARY
nh
DISCUSSION QUESTIONS AND ANSWERS n h n h n h
1. What is the entrepreneurial process?
n h n h n h n h
The entrepreneurial process comprises: developing opportunities, gathering resources, and
nh nh nh nh nh nh nh nh
managing and building operations with the goal of creating value.
nh n h n h nh n h nh n h n h n h nh
2. What is entrepreneurship? What are some basic characteristics of entrepreneurs?
n h nh n h n h n h nh nh n h n h
Entrepreneurship is the process of changing ideas into commercial opportunities and creating
nh nh nh nh nh nh nh nh nh nh nh
value. While there is no prototypical entrepreneur, many are good at recognizing
nh nh nh nh nh nh nh nh nh nh nh
commercial opportunities, tend to be optimistic, and envision a plan for the future.
nh nh nh nh nh nh nh nh nh nh nh nh nh
3. Why do businesses close or cease operating? What are the primary reasons why businessesfail?
nh n h n h nh nh n h n h nh nh nh n h n h nh
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nh nh nh nh nh nh nh nh nh nh
SOLUTION MANUAL For Entrepreneurial Finance, 7th Edition
nh nh nh nh nh nh
nh by J. Chris Leach, Ronald W. Melicher, Chapters 1 - 16,
nh nh nh nh nh nh nh nh nh nh nh
nh Complete With CAPSTONE CASESnh nh nh n h
Downloaded by: Bookista | Want to earn $1.236
Distribution of this document is illegal extra per year?
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
TABLE OF CONTENTS n h nh
Part 1: THE ENTREPRENEURIAL ENVIRONMENT.
n h n h n h n h
1. Introduction n h to
Finance for Entrepreneurs. n h n h
2. Developing the Business Idea. n h n h n h
Part 2: ORGANIZING AND OPERATING THE VENTURE.
n h n h n h n h n h n h
3. Organizing and Financing a New Venture. n h n h n h n h n h
4. Preparing and Using Financial Statements. n h n h n h n h
5. Evaluating Operating and Financial n h n h n h
n h Performance. Part 3: PLANNING FOR THE nh n h n h n h n h
nh FUTURE.
6. Managing Cash Flow. n h n h
7. Types and Costs of Financial Capital. n h n h n h n h n h
8. Securities Law Considerations When Obtaining Venture n h n h n h n h n h
n h Financing. Part 4: CREATING AND RECOGNIZING VENTURE nh n h n h n h n h n h
n h VALUE.
9. Projecting Financial Statements. n h n h
10. Valuing Early-Stage Ventures. n h n h
11. Venture Capital Valuation Methods. n h n h n h
Part 5: STRUCTURING FINANCING FOR THE GROWING VENTURE.
n h n h n h n h n h n h n h
12. Professional Venture Capital. n h n h
13. Other Financing Alternatives. n h n h
14. Security Structures and Determining Enterprise n h n h n h n h
n h Values. Part 6: EXIT AND TURNAROUND STRATEGIES.
nh n h n h n h n h n h
15. Harvesting the Business Venture Investment. n h n h n h n h
16. Financially Troubled Ventures: Turnaround n h n h n h
n h Opportunities? Part 7: CAPSTONE CASES. nh n h nh n h
Case 1. Eco-Products, Inc.
n h n h n h
nhCase 2. Spatial Technology,
n h n h n h
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Distribution of this document is illegal extra per year?
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
Chapter 1 nh
INTRODUCTION TO FINANCE FOR n h n h n h
n h ENTREPRENEURS FOCUS nh
The purpose of this first chapter is to present an overview of what entrepreneurial finance is
n h nh n h nh nh nh nh nh nh nh nh nh nh n h nh
about. In doing so we hope to convey to you the importance of understanding and applying
nh nh nh nh nh nh n h nh nh nh nh nh nh nh nh nh
entrepreneurial finance methods and tools to help ensure an entrepreneurial venture is
nh nh nh nh nh nh nh nh nh nh nh nh
successful. We present a life cycle approach to the teaching of entrepreneurial finance where
nh nh nh nh nh nh nh nh nh nh nh nh nh nh
we cover venture operating and financial decisions faced by the entrepreneur as a venture
nh nh nh nh nh nh nh nh nh nh nh nh nh nh
progresses from an idea through to harvesting the venture.
nh nh nh nh nh n h nh nh nh
LEARNING OBJECTIVES n h
LO 1.1: Characterize the entrepreneurial process.
nh nh nh nh nh
LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs.
nh nh n h nh n h n h nh n h
LO 1.3: Indicate several megatrends providing waves of entrepreneurial
n h n h n h nh nh n h n h nh
opportunities. LO 1.4: List and describe the seven principles of entrepreneurial
n h nh nh n h nh nh nh nh nh nh nh
finance.
nh
LO 1.5: Discuss entrepreneurial finance and the role of the financial
nh nh nh nh nh nh nh nh nh nh
manager. LO 1.6: Describe the various stages of a successful venture‗s life
nh nh nh nh nh nh nh nh nh nh nh nh
cycle.
nh
LO 1.7: Identify, by life cycle stage, the relevant types of financing and
nh nh nh nh nh nh nh nh nh nh nh nh
investors. LO 1.8: Understand the life cycle approach used in this book.
nh nh nh nh nh nh nh nh nh nh nh nh
CHAPTER OUTLINE n h
16.1 THE ENTREPRENEURIAL PROCESS n h n h
16.2 ENTREPRENEURSHIP FUNDAMENTALS n h
A. Who is an Entrepreneur? nh nh nh
B. Basic Definitions n h
C. Entrepreneurial Traits or Characteristics nh nh nh
D. Opportunities Exist But Not Without Risks n h n h nh n h nh
16.3SOURCES OF ENTREPRENEURIAL OPPORTUNITIES n h n h n h
A. Societal Changes nh
B. Demographic Changes n h
C. Technological Changes nh
D. Emerging Economies and Global Changes n h n h n h n h
E. Crises and ―Bubbles‖ nh n h
F. Disruptive Innovation n h
1
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16.4 PRINCIPLES OF ENTREPRENEURIAL FINANCE n h n h n h
A. Real, Human, and Financial Capital must be Rented from Owners (Principle #1)
n h n h n h n h n h n h n h n h n h n h n h
B. Risk and Expected Reward go Hand in Hand (Principle #2)
nh nh n h nh n h nh nh n h nh
C. While Accounting is the Language of Business, Cash is the Currency (Principle #3)
n h n h n h n h n h n h n h n h n h n h n h n h
D. New Venture Financing Involves Search, Negotiation, and Privacy (Principle #4)
n h n h n h n h n h n h n h n h n h
E. A Venture‗s Financial Objective is to Increase Value (Principle #5)
n h n h n h n h n h n h n h n h n h
F. It is Dangerous to Assume that People Act Against Their Own Self-
nh nh n h nh n h nh n h n h nh nh nh
Interests (Principle #6) nh n h
G. Venture Character and Reputation can be Assets or Liabilities (Principle #7)
nh nh nh nh nh nh nh nh nh nh
16.5 ROLE OF ENTREPRENEURIAL FINANCE nh nh nh
16.6 THE SUCCESSFUL VENTURE LIFE CYCLE
n h n h n h n h
A. Development Stage n h
B. Startup Stage n h
C. Survival Stage n h
D. Rapid-Growth Stage n h
E. Early-Maturity Stage nh
F. Life Cycle Stages and the Entrepreneurial Process
n h n h n h n h n h n h
16.7 FINANCING THROUGH THE VENTURE LIFE CYCLE n h n h n h n h n h
A. Seed Financing n h
B. Startup Financing n h
C. First-Round Financing n h
D. Second-Round Financing n h
E. Mezzanine Financing n h
F. Liquidity-Stage Financing n h
G. Seasoned Financing nh
16.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCE
nh nh nh nh nh nh
SUMMARY
nh
DISCUSSION QUESTIONS AND ANSWERS n h n h n h
1. What is the entrepreneurial process?
n h n h n h n h
The entrepreneurial process comprises: developing opportunities, gathering resources, and
nh nh nh nh nh nh nh nh
managing and building operations with the goal of creating value.
nh n h n h nh n h nh n h n h n h nh
2. What is entrepreneurship? What are some basic characteristics of entrepreneurs?
n h nh n h n h n h nh nh n h n h
Entrepreneurship is the process of changing ideas into commercial opportunities and creating
nh nh nh nh nh nh nh nh nh nh nh
value. While there is no prototypical entrepreneur, many are good at recognizing
nh nh nh nh nh nh nh nh nh nh nh
commercial opportunities, tend to be optimistic, and envision a plan for the future.
nh nh nh nh nh nh nh nh nh nh nh nh nh
3. Why do businesses close or cease operating? What are the primary reasons why businessesfail?
nh n h n h nh nh n h n h nh nh nh n h n h nh
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