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

SOLUTION MANUAL For Entrepreneurial Finance, 7th Edition
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by J. Chris Leach, Ronald W. Melicher, Chapters 1 - 16,
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Complete With CAPSTONE CASES
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,TABLE OF CONTENTS m m m




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




INTRODUCTIONmTOmFINANCEmFORmENTREPRENEURS

FOCUS

Thempurposemofmthismfirstmchaptermismtompresentmanmoverviewmofmwhatmentrepreneurialmfinancemismabout.mInmd
oingmsomwemhopemtomconveymtomyoumthemimportancemofmunderstandingmandmapplyingmentrepreneurialmfinancem
methodsmandmtoolsmtomhelpmensuremanmentrepreneurialmventuremismsuccessful.mWempresentmamlifemcyclemapproa
chmtomthemteachingmofmentrepreneurialmfinancemwheremwemcovermventuremoperatingmandmfinancialmdecisionsmfa
cedmbymthementrepreneurmasmamventuremprogressesmfrommanmideamthroughmtomharvestingmthemventure.

LEARNINGmOBJECTIVES

LOm1.1:mCharacterizemthementrepreneurialmprocess.
LOm1.2:mDescribementrepreneurshipmandmsomemcharacteristicsmofmentrepreneurs.
LOm1.3:mIndicatemseveralmmegatrendsmprovidingmwavesmofmentrepreneurialmopportunities.mLOm1.
4:mListmandmdescribemthemsevenmprinciplesmofmentrepreneurialmfinance.
LOm1.5:mDiscussmentrepreneurialmfinancemandmthemrolemofmthemfinancialmmanager.mLOm1
.6:mDescribemthemvariousmstagesmofmamsuccessfulmventure‘smlifemcycle.
LOm1.7:mIdentify,mbymlifemcyclemstage,mthemrelevantmtypesmofmfinancingmandminvestors.mLOm1.
8:mUnderstandmthemlifemcyclemapproachmusedminmthismbook.

CHAPTERmOUTLINE

1.1 THEmENTREPRENEURIALmPROCESS
1.2 ENTREPRENEURSHIPmFUNDAMENTALS
A. WhomismanmEntrepreneur?
B. BasicmDefinitions
C. EntrepreneurialmTraitsmormCharacteristics
D. OpportunitiesmExistmButmNotmWithoutmRisks
1.3 SOURCESmOFmENTREPRENEURIALmOPPORTUNITIES
A. SocietalmChanges
B. DemographicmChanges
C. TechnologicalmChanges
D. EmergingmEconomiesmandmGlobalmChanges
E. Crisesmandm―Bubbles‖
F. DisruptivemInnovation


1

, 1.4 PRINCIPLESmOFmENTREPRENEURIALmFINANCE
A. Real,mHuman,mandmFinancialmCapitalmmustmbemRentedmfrommOwnersm(Principlem#1)
B. RiskmandmExpectedmRewardmgomHandminmHandm(Principlem#2)
C. WhilemAccountingmismthemLanguagemofmBusiness,mCashmismthemCurrencym(Principlem#3)
D. NewmVenturemFinancingmInvolvesmSearch,mNegotiation,mandmPrivacym(Principlem#4)
E. AmVenture‘smFinancialmObjectivemismtomIncreasemValuem(Principlem#5)
F. ItmismDangerousmtomAssumemthatmPeoplemActmAgainstmTheirmOwnmSelf-
Interestsm(Principlem#6)
G. VenturemCharactermandmReputationmcanmbemAssetsmormLiabilitiesm(Principlem#7)
1.5 ROLEmOFmENTREPRENEURIALmFINANCE
1.6 THEmSUCCESSFULmVENTUREmLIFEmCYCLE
A. DevelopmentmStage
B. StartupmStage
C. SurvivalmStage
D. Rapid-GrowthmStage
E. Early-MaturitymStage
F. LifemCyclemStagesmandmthemEntrepreneurialmProcess
1.7 FINANCINGmTHROUGHmTHEmVENTUREmLIFEmCYCLE
A. SeedmFinancing
B. StartupmFinancing
C. First-RoundmFinancing
D. Second-RoundmFinancing
E. MezzaninemFinancing
F. Liquidity-StagemFinancing
G. SeasonedmFinancing
1.8 LIFEmCYCLEmAPPROACHmFORmTEACHINGmENTREPRENEURIALmFINANCEmSUMMA
RY


DISCUSSIONmQUESTIONSmANDmANSWERS

1. Whatmismthementrepreneurialmprocess?

Thementrepreneurialmprocessmcomprises:mdevelopingmopportunities,mgatheringmresources,mandmmanagi
ngmandmbuildingmoperationsmwithmthemgoalmofmcreatingmvalue.

2. Whatmismentrepreneurship?mWhatmaremsomembasicmcharacteristicsmofmentrepreneurs?

Entrepreneurshipmismthemprocessmofmchangingmideasmintomcommercialmopportunitiesmandmcreatingmvalue.m
Whilemtheremismnomprototypicalmentrepreneur,mmanymaremgoodmatmrecognizingmcommercialmopportunitie
s,mtendmtombemoptimistic,mandmenvisionmamplanmformthemfuture.

3. Whymdombusinessesmclosemormceasemoperating?mWhatmaremthemprimarymreasonsmwhymbusinessesmfail?