Solution manual for entrepreneurial finance 7th edition J. Chris Leach, Ronald W. Melicher Chapters 1 - 16 with Capstone Cases

SOLUTION,MANUAL
Entrepreneurial,Finance,,7th,Edition
J.,Chris,Leach,,Ronald,W.,Melicher
Chapters,1,-,16,With,CAPSTONE,CASES

,TABLE,OF,CONTENTS,

Part,1:,THE,ENTREPRENEURIAL,ENVIRONMENT.
1. Introduction,to,Finance,for,Entrepreneurs.
2. Developing,the,Business,Idea.
Part,2:,ORGANIZING,AND,OPERATING,THE,VENTURE.
3. Organizing,and,Financing,a,New,Venture.
4. Preparing,and,Using,Financial,Statements.
5. Evaluating,Operating,and,Financial,Performance., Part,
3:,PLANNING,FOR,THE,FUTURE.
6. Managing,Cash,Flow.
7. Types,and,Costs,of,Financial,Capital.
8. Securities,Law,Considerations,When,Obtaining,Venture,Financing., Part,4:,
CREATING,AND,RECOGNIZING,VENTURE,VALUE.
9. Projecting,Financial,Statements.
10. Valuing,Early-Stage,Ventures.
11. Venture,Capital,Valuation,Methods.
Part,5:,STRUCTURING,FINANCING,FOR,THE,GROWING,VENTURE.
12. Professional,Venture,Capital.
13. Other,Financing,Alternatives.
14. Security,Structures,and,Determining,Enterprise,Values., Part,6:,
EXIT,AND,TURNAROUND,STRATEGIES.
15. Harvesting,the,Business,Venture,Investment.
16. Financially,Troubled,Ventures:,Turnaround,Opportunities?, Part,7:,
CAPSTONE,CASES.
Case,1.,Eco-
Products,,Inc., Case,2.,Spatial,Tec
hnology,

,Chapter,1
INTRODUCTION,TO,FINANCE,FOR,ENTREPRENEURS, FOCUS

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

LEARNING,OBJECTIVES

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

CHAPTER,OUTLINE

1.1 THE,ENTREPRENEURIAL,PROCESS
1.2 ENTREPRENEURSHIP,FUNDAMENTALS
A. Who,is,an,Entrepreneur?
B. Basic,Definitions
C. Entrepreneurial,Traits,or,Characteristics
D. Opportunities,Exist,But,Not,Without,Risks
1.3 SOURCES,OF,ENTREPRENEURIAL,OPPORTUNITIES
A. Societal,Changes
B. Demographic,Changes
C. Technological,Changes
D. Emerging,Economies,and,Global,Changes
E. Crises,and,―Bubbles‖
F. Disruptive,Innovation


1

, 1.4 PRINCIPLES,OF,ENTREPRENEURIAL,FINANCE
A. Real,,Human,,and,Financial,Capital,must,be,Rented,from,Owners,(Principle,#1)
B. Risk,and,Expected,Reward,go,Hand,in,Hand,(Principle,#2)
C. While,Accounting,is,the,Language,of,Business,,Cash,is,the,Currency,(Principle,#3)
D. New,Venture,Financing,Involves,Search,,Negotiation,,and,Privacy,(Principle,#4)
E. A,Venture‘s,Financial,Objective,is,to,Increase,Value,(Principle,#5)
F. It,is,Dangerous,to,Assume,that,People,Act,Against,Their,Own,Self-
, Interests(Principle,#6)
G. Venture,Character,and,Reputation,can,be,Assets,or,Liabilities,(Principle,#7)
1.5 ROLE,OF,ENTREPRENEURIAL,FINANCE
1.6 THE,SUCCESSFUL,VENTURE,LIFE,CYCLE
A. Development,Stage
B. Startup,Stage
C. Survival,Stage
D. Rapid-Growth,Stage
E. Early-Maturity,Stage
F. Life,Cycle,Stages,and,the,Entrepreneurial,Process
1.7 FINANCING,THROUGH,THE,VENTURE,LIFE,CYCLE
A. Seed,Financing
B. Startup,Financing
C. First-Round,Financing
D. Second-Round,Financing
E. Mezzanine,Financing
F. Liquidity-Stage,Financing
G. Seasoned,Financing
1.8 LIFE,CYCLE,APPROACH,FOR,TEACHING,ENTREPRENEURIAL,FINANCE, SUM
MARY


DISCUSSION,QUESTIONS,AND,ANSWERS

1. What,is,the,entrepreneurial,process?

The,entrepreneurial,process,comprises:,developing,opportunities,,gathering,resources,, andmana
ging,and,building,operations,with,the,goal,of,creating,value.

2. What,is,entrepreneurship?,What,are,some,basic,characteristics,of,entrepreneurs?

Entrepreneurship,is,the,process,of,changing,ideas,into,commercial,opportunities,and, creatingval
ue.,,While,there,is,no,prototypical,entrepreneur,,many,are,good,at,recognizing, commercial,op
portunities,,tend,to,be,optimistic,,and,envision,a,plan,for,the,future.

3. Why,do,businesses,close,or,cease,operating?,What,are,the,primary,reasons,why,businesses, f
ail?