Complete Solutions Manual — Entrepreneurial Finance, 7th Edition — J. Chris Leach — ISBN 9780357442043 — (All Chapters Covered 1–16, Solutions Included)

Entrepreneurial
Finance 7th Edition
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SOLUTIONS
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MANUAL
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J. Chris Leach
Ronald W. Melicher
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Comprehensive Solutions Manual for Instructors
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and Students
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© J. Chris Leach & Ronald W. Melicher.

All rights reserved. Reproduction or distribution without permission is prohibited.
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© Successhands

, Solutions Manual for Entrepreneurial Finance (7th Edition)
J. Chris Leach & Ronald W. Melicher
ISBN: 9780357442043
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PART 1: THE ENTREPRENEURIAL ENVIRONMENT
Chapter 1. Introduction to Finance for Entrepreneurs
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Chapter 2. Developing the Business Idea

PART 2: ORGANIZING AND OPERATING THE VENTURE
Chapter 3. Organizing and Financing a New Venture
Chapter 4. Preparing and Using Financial Statements
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Chapter 5. Evaluating Operating and Financial Performance

PART 3: PLANNING FOR THE FUTURE
Chapter 6. Managing Cash Flow
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Chapter 7. Types and Costs of Financial Capital
Chapter 8. Securities Law Considerations When Obtaining Venture
Financing
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PART 4: CREATING AND RECOGNIZING VENTURE VALUE
Chapter 9. Projecting Financial Statements
Chapter 10. Valuing Early-Stage Ventures
Chapter 11. Venture Capital Valuation Methods
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PART 5: STRUCTURING FINANCING FOR THE GROWING
VENTURE
Chapter 12. Professional Venture Capital
Chapter 13. Other Financing Alternatives
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Chapter 14. Security Structures and Determining Enterprise Values

PART 6: EXIT AND TURNAROUND STRATEGIES
Chapter 15. Harvesting the Business Venture Investment
Chapter 16. Financially Troubled Ventures: Turnaround Opportunities?
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© Successhands

, Solution Manual For
Entrepreneurial Finance, 7th Edition J. Chris Leach (Author),
Ronald W. Melicher (Author)
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Chapter 1-16 With Cases Products &Spatial Tech

Chapter 1
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INTRODUCTION TO FINANCE FOR ENTREPRENEURS

FOCUS

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

LEARNING OBJECTIVES

LO 1.1: Characterize the entrepreneurial process.
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LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs.
LO 1.3: Indicate several megatrends providing waves of entrepreneurial opportunities.
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.
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LO 1.7: Identify, by life cycle stage, the relevant types of financing and investors.
LO 1.8: Understand the life cycle approach used in this book.

CHAPTER OUTLINE
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1.1 THE ENTREPRENEURIAL PROCESS
1.2 ENTREPRENEURSHIP FUNDAMENTALS
A. Who is an Entrepreneur?
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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
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C. Technological Changes
D. Emerging Economies and Global Changes
E. Crises and ―Bubbles‖
F. Disruptive Innovation


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, 2 Chapter 6: Managing Cash Flow


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)
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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)
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1.5 ROLE OF ENTREPRENEURIAL FINANCE
1.6 THE SUCCESSFUL VENTURE LIFE CYCLE
A. Development Stage
B. Startup Stage
C. Survival Stage
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D. Rapid-Growth Stage
E. Early-Maturity Stage
F. Life Cycle Stages and the Entrepreneurial Process
1.7 FINANCING THROUGH THE VENTURE LIFE CYCLE
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A. Seed Financing
B. Startup Financing
C. First-Round Financing
D. Second-Round Financing
E. Mezzanine Financing
F. Liquidity-Stage Financing
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G. Seasoned Financing
1.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCE
SUMMARY
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DISCUSSION QUESTIONS AND ANSWERS

1. What is the entrepreneurial process?

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

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 creating
value. While there is no prototypical entrepreneur, many are good at recognizing
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
fail?