MAN 320F - Test 3/FINAL Exam
Questions and Answers 100% Solved
Start up companies usually - ✔✔FAIL
What are the 3 top sources of start up funding? - ✔✔Venture Capital, State
Funds, Angel Investors
What is the "napkin idea" stage of investment? - ✔✔This means that it is
the earliest stage of investment possible, the seed stage
The early stage of investment means that - ✔✔the early stage of
investment means that it may be early on in a company but it still be
making some revenue
What is important to note about the seed/early stage? - ✔✔-this is the
preferred investment/company stage
-means invest at the very beginning
Angel investors like to invest "in their backyard", what does this mean? -
✔✔this means that they like to invest on things that they can easily check
on and have a close look at when need be
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,What percentage of time do investors think they are not getting a good
deal? - ✔✔57% of the time
What is an important idea about investment? - ✔✔its not what you start
with, its what you end with
What is the track record in investments? - ✔✔40% of deals fail, 40% of
deals do ok but nothing great, and 20% of deals make up for the other 80%
that don't do that well
Where do I get the money to invest? - ✔✔-pension funds
-insurance companies
-endowments
-foundations
-high net worth individuals
What are equity investments made to fund? - ✔✔Equity investments are
made to fund the launch, early development, or expansion of a young
company
Offsetting the high risk, investors _____ - ✔✔have the expectation of
higher than average return on investment
Who will venture capitalist fund? - ✔✔an entrepreneur
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,An entrepreneur is someone who - ✔✔assumes the financial risk of
beginning and managing a new business
What does a "perfect" investment opportunity look like? - ✔✔-an
experienced/proven management team
-a great idea/concept that is proprietary
-something that cannot be duplicated
-a product or service that 7 billion humans will buy
-a great rate of return on investment
-intellectual property that is protected by patents or trademarks
A perfect investment does not - ✔✔exist
What are the 3 laws of business? - ✔✔1- it will always cost more than you
thought it would
2- It will always take longer than you anticipated
3- things change continuously
What really matters in business and investment? - ✔✔MARKET
OPPORTUNITY
How do you find the right venture capital?? - ✔✔-need to talk to allied
professionals such as lawyers, accountants, and entrepreneurs (its not just
what you know but WHO you know)
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, -find the venture capitalist who have invested or specialized in your industry
-many large corporations have dedicated VC funds to invest in companies
strategic to their core business
What do we need to prepare for the VC? - ✔✔-an honest business plan
with risks, challenges, opportunities, and issues
-what key members you need to hire and where they will come from
-clear strategic goals and what you plan on doing to achieve those goals
-potential customers
-a path towards liquidity
companies are bought, NOT - ✔✔sold
What do you do to "get the check"? - ✔✔-competitive deals get funded
because VC's don't want to miss out on what their colleagues view as a
great bet
-probably giving up majority of the stock
-follow their advice (golden rule)
-By the time of IPO (initial public offering/they can sell their stock to the
public now) founders own 20%
-Be ready for the fast lane
4
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Questions and Answers 100% Solved
Start up companies usually - ✔✔FAIL
What are the 3 top sources of start up funding? - ✔✔Venture Capital, State
Funds, Angel Investors
What is the "napkin idea" stage of investment? - ✔✔This means that it is
the earliest stage of investment possible, the seed stage
The early stage of investment means that - ✔✔the early stage of
investment means that it may be early on in a company but it still be
making some revenue
What is important to note about the seed/early stage? - ✔✔-this is the
preferred investment/company stage
-means invest at the very beginning
Angel investors like to invest "in their backyard", what does this mean? -
✔✔this means that they like to invest on things that they can easily check
on and have a close look at when need be
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,What percentage of time do investors think they are not getting a good
deal? - ✔✔57% of the time
What is an important idea about investment? - ✔✔its not what you start
with, its what you end with
What is the track record in investments? - ✔✔40% of deals fail, 40% of
deals do ok but nothing great, and 20% of deals make up for the other 80%
that don't do that well
Where do I get the money to invest? - ✔✔-pension funds
-insurance companies
-endowments
-foundations
-high net worth individuals
What are equity investments made to fund? - ✔✔Equity investments are
made to fund the launch, early development, or expansion of a young
company
Offsetting the high risk, investors _____ - ✔✔have the expectation of
higher than average return on investment
Who will venture capitalist fund? - ✔✔an entrepreneur
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,An entrepreneur is someone who - ✔✔assumes the financial risk of
beginning and managing a new business
What does a "perfect" investment opportunity look like? - ✔✔-an
experienced/proven management team
-a great idea/concept that is proprietary
-something that cannot be duplicated
-a product or service that 7 billion humans will buy
-a great rate of return on investment
-intellectual property that is protected by patents or trademarks
A perfect investment does not - ✔✔exist
What are the 3 laws of business? - ✔✔1- it will always cost more than you
thought it would
2- It will always take longer than you anticipated
3- things change continuously
What really matters in business and investment? - ✔✔MARKET
OPPORTUNITY
How do you find the right venture capital?? - ✔✔-need to talk to allied
professionals such as lawyers, accountants, and entrepreneurs (its not just
what you know but WHO you know)
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, -find the venture capitalist who have invested or specialized in your industry
-many large corporations have dedicated VC funds to invest in companies
strategic to their core business
What do we need to prepare for the VC? - ✔✔-an honest business plan
with risks, challenges, opportunities, and issues
-what key members you need to hire and where they will come from
-clear strategic goals and what you plan on doing to achieve those goals
-potential customers
-a path towards liquidity
companies are bought, NOT - ✔✔sold
What do you do to "get the check"? - ✔✔-competitive deals get funded
because VC's don't want to miss out on what their colleagues view as a
great bet
-probably giving up majority of the stock
-follow their advice (golden rule)
-By the time of IPO (initial public offering/they can sell their stock to the
public now) founders own 20%
-Be ready for the fast lane
4
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
