SOLUTION MANUAL-Entrepreneurial Finance, 7th Edition by J. Chris Leach, Ronald W. Melicher, Chapters 1 – 16||Complete Guide A+||Latest Update

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EntrepreneurialFinance,7thEditionjh jh jh




J. Chris Leach, Ronald W. Melicher
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Chapters1 -16WithCAPSTONE CASES
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,TABLE OF CONTENTS jh jh jh




Part 1: THE ENTREPRENEURIAL ENVIRONMENT.
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1. Introduction to Finance for Entrepreneurs. jh jh jh jh




2. Developing the Business Idea. jh jh jh




Part 2: ORGANIZING AND OPERATING THE VENTURE.
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3. Organizing and Financing a New Venture. jh jh jh jh jh




4. Preparing and Using Financial Statements. jh jh jh jh




5. Evaluating Operating and Financial Performance. Part jh jh jh jh j h




3: PLANNING FOR THE FUTURE.
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6. Managing Cash Flow. jh jh




7. Types and Costs of Financial Capital.
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8. Securities Law Considerations When Obtaining Venture Financing. Part 4:
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CREATING AND RECOGNIZING VENTURE VALUE.
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9. Projecting Financial Statements. jh jh




10. Valuing Early-Stage Ventures. jh jh




11. Venture Capital Valuation Methods. jh jh jh




Part 5: STRUCTURING FINANCING FOR THE GROWING VENTURE.
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12. Professional Venture Capital. jh jh




13. Other Financing Alternatives. jh jh




14. Security Structures and Determining Enterprise Values. Part 6:
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EXIT AND TURNAROUND STRATEGIES.
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15. Harvesting the Business Venture Investment. jh jh jh jh




16. Financially Troubled Ventures: Turnaround Opportunities? Part 7: jh jh jh jh j h jh




CAPSTONE CASES.
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Case 1. Eco-Products, Inc. Case
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2. Spatial Technology,
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,Chapter 1 jh




INTRODUCTION TO FINANCE FOR ENTREPRENEURS FOCUS jh jh jh jh j h




The purpose of this first chapter is to present an overview of what entrepreneurial finance is about.
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In doing so we hope to convey to you the importance of understanding and applying
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j entrepreneurial finance methods and tools to help ensure an entrepreneurial venture is
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j successful.We present a life cycle approach to the teaching of entrepreneurial finance where
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j we cover venture operating and financial decisions faced by the entrepreneur as a venture
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j progresses from an idea through to harvesting the venture.
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LEARNING OBJECTIVES jh




LO 1.1: Characterize the entrepreneurial process.
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LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs. LO
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1.3: Indicate several megatrends providing waves of entrepreneurial
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opportunities.LO 1.4: List and describe the seven principles of entrepreneurial
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j finance.
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LO 1.5: Discuss entrepreneurial finance and the role of the financial manager.LO
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1.6: Describe the various stages of a successful venture‘s life cycle.
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LO 1.7: Identify, by life cycle stage, the relevant types of financing and
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investors.LO 1.8: Understand the life cycle approach used in this book.
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CHAPTER OUTLINE jh




1.1 THE ENTREPRENEURIAL PROCESS jh jh



1.2 ENTREPRENEURSHIP FUNDAMENTALS jh



A. Who is an Entrepreneur? jh jh jh



B. Basic Definitions jh



C. Entrepreneurial Traits or Characteristics jh jh jh



D. Opportunities Exist But Not Without Risks jh jh jh jh jh



1.3 SOURCES OF ENTREPRENEURIAL OPPORTUNITIES jh jh jh



A. Societal Changes jh



B. Demographic Changes jh



C. Technological Changes jh



D. Emerging Economies and Global Changes jh jh jh jh



E. Crises and ―Bubbles‖ jh jh



F. Disruptive Innovation jh




1

, 1.4 PRINCIPLES OF ENTREPRENEURIAL FINANCE jh jh jh



A. Real, Human, and Financial Capital must be Rented from Owners (Principle #1)
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B. Risk and Expected Reward go Hand in Hand (Principle #2)
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C. While Accounting is the Language of Business, Cash is the Currency (Principle #3)
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D. New Venture Financing Involves Search, Negotiation, and Privacy (Principle #4)
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E. A Venture‘s Financial Objective is to Increase Value (Principle #5)
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F. It is Dangerous to Assume that People Act Against Their Own Self-
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Interests(Principle #6) j h jh



G. Venture Character and Reputation can be Assets or Liabilities (Principle #7) jh jh jh jh jh jh jh jh jh jh



1.5 ROLE OF ENTREPRENEURIAL FINANCE
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1.6 THE SUCCESSFUL VENTURE LIFE CYCLE
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A. DevelopmentStage jh



B. Startup Stage jh



C. Survival Stage jh



D. Rapid-GrowthStage jh



E. Early-MaturityStage jh



F. Life Cycle Stages and the Entrepreneurial Process jh jh jh jh jh jh



1.7 FINANCING THROUGH THE VENTURE LIFE CYCLE jh jh jh jh jh



A. Seed Financing jh



B. Startup Financing jh



C. First-Round Financing jh



D. Second-RoundFinancing jh



E. Mezzanine Financing jh



F. Liquidity-StageFinancing jh



G. Seasoned Financing jh



1.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCE
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SUMMARY
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DISCUSSION QUESTIONS AND ANSWERS jh jh jh




1. What is the entrepreneurial process?
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The entrepreneurial process comprises: developing opportunities, gathering resources,
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j andmanaging and building operations with the goal of creating value.
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2. What is entrepreneurship? What are some basic characteristics of entrepreneurs?
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Entrepreneurship is the process of changing ideas into commercial opportunities and jh jh jh jh jh jh jh jh jh jh



j creatingvalue. While there is no prototypical entrepreneur, many are good at recognizing
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j commercial opportunities, tend to be optimistic, and envision a plan for the future.
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3. Why do businesses close or cease operating? What are the primary reasons why businesses
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jfail?
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