Innovation and Entrepreneurship Latest Updated Exam

Innovation and Entrepreneurship Latest Updated Exam Which of the following large firms have been a leading source of venture capital in the United States? - ANSWER- 1)Cisco 2)Intel 3)Microsoft Identify the typical advantages of having suppliers invest in a new business. - ANSWER- 1)Suppliers do not aim to take the business over if it does particularly well. 2)Suppliers refrain from trying to run the business. A(n) _____ _____ fund is a fund that is usually organized as a limited partnership and is organized to make significant equity investments in high-growth new ventures. - ANSWER- 1)Venture 2)Capital Which form of equity investors refers to high-net-worth individuals that invest widely in business? - ANSWER- Business angels __________ involves entrepreneurs making a pitch on an Internet site and letting potential investors know what they will receive for their funding, which might be equity but is more often a product, service, or a gift. - ANSWER- Crowdfunding Which form of funding is used by a business to conserve cash and maintain the latest versions of whatever equipment is available? - ANSWER- Asset lease When accounts receivable are sold at a discount to another company to receive immediate cash, it is referred to as _____. - ANSWER- factoring Which of the following is a disadvantage of factoring for a new business? - ANSWER- The business will not receive the full amount of debt that is due to it. When someone provides funding in return for some ownership in the new business, it is referred to as a(n) __________. - ANSWER- equity investment Which of the following are sources of nonequity capital to start a business? - ANSWER- 1)Debts 2)Grants _____ is a major source of nonequity financing and can come from banks, credit cards, or suppliers. - ANSWER- Debt A(n) _____ is simply money designed to help the new business begin operations with no expectation of repayment. - ANSWER- grant Which of the following is NOT a common form of debt for a new business? - ANSWER- Venture capital What is the generic term used to describe any type of nonequity funding tied to the business? - ANSWER- Debt Which type of funding involves a contractual agreement whereby the business receives some amount of money that must be repaid over a specified period of time at a specified interest rate? - ANSWER- Loan Banks have traditionally been a major source of funds for: - ANSWER- established firms. TRUE/FALSE: There is no need to treat a loan from family as a contractual agreement. - ANSWER- FALSE