ENTR 4222-Questions and Complete Answers|
Verified 100% Correct| Newest 2024-2025
A potential investor is willing to provide $500,000 in first-round financing with the
expectation of a 50% annualcompound rate of return over the next five years. Founders
currently hold 1,000,000 million shares of stock. Theventure is expected to produce
$500,000 in net income in year 5. A similar firm with annual net income of$1,000,000
sold shares to the public for $10,000,000. What is the post-money valuation? -
✔✔$658,354
A potential investor is willing to provide $500,000 in first-round financing with the
expectation of a 50% annualcompound rate of return over the next five years. Founders
currently hold 1,000,000 million shares of stock. Theventure is expected to produce
$500,000 in net income in year 5. A similar firm with annual net income of$1,000,000
sold shares to the public for $10,000,000. What is the value of the venture at the end of
year 5 usingdirect capitalization? - ✔✔$5,000,000
As venture firms attract money from investors, it is placed in a fund. Important issues
that must be put in place with the establishment of the fund include all of the following
except: - ✔✔assigning the management team to each borrower
The term "carried interest" refers to: - ✔✔interest owed on a loan in default
In a venture capital fund placement memorandum, which of the following is not part of
the fund overview? - ✔✔general partners' capital contributions
In a venture capital fund placement memorandum, which of the following is not part of
the offering summary? - ✔✔management fee
, In a venture capital fund placement memorandum, all of the following are included in
the summary of terms except: - ✔✔objective
Which of the following is the largest percentage supplier of venture capital? -
✔✔public pension funds
When screening possible investments, a venture capital firm might issue a SLOR, which
stands for: - ✔✔"standard letter of rejection"
When screening prospective new ventures, venture capital firms consider their own
funds' requirements. Which of the following is not one of the venture firm's
requirements relating to its own funds? - ✔✔probable stock listing exchange for the
mature venture
All of the following are typical issues addressed in a term sheet except: -
✔✔management fees
Which of the following is not a common characteristic of business incubators? -
✔✔they make equity investments in their client firms
Which of the following types of crowdfunding involves soliciting nonequity funds to
finance specific businessproducts and services or requesting donations for a specific
purpose? - ✔✔rewards-based crowdfunding
When assessing the creditworthiness of new entrepreneurs, lending institutions review
the "Five C's." The ability of the entrepreneur to repay borrowed funds is known as: -
✔✔capacity
Verified 100% Correct| Newest 2024-2025
A potential investor is willing to provide $500,000 in first-round financing with the
expectation of a 50% annualcompound rate of return over the next five years. Founders
currently hold 1,000,000 million shares of stock. Theventure is expected to produce
$500,000 in net income in year 5. A similar firm with annual net income of$1,000,000
sold shares to the public for $10,000,000. What is the post-money valuation? -
✔✔$658,354
A potential investor is willing to provide $500,000 in first-round financing with the
expectation of a 50% annualcompound rate of return over the next five years. Founders
currently hold 1,000,000 million shares of stock. Theventure is expected to produce
$500,000 in net income in year 5. A similar firm with annual net income of$1,000,000
sold shares to the public for $10,000,000. What is the value of the venture at the end of
year 5 usingdirect capitalization? - ✔✔$5,000,000
As venture firms attract money from investors, it is placed in a fund. Important issues
that must be put in place with the establishment of the fund include all of the following
except: - ✔✔assigning the management team to each borrower
The term "carried interest" refers to: - ✔✔interest owed on a loan in default
In a venture capital fund placement memorandum, which of the following is not part of
the fund overview? - ✔✔general partners' capital contributions
In a venture capital fund placement memorandum, which of the following is not part of
the offering summary? - ✔✔management fee
, In a venture capital fund placement memorandum, all of the following are included in
the summary of terms except: - ✔✔objective
Which of the following is the largest percentage supplier of venture capital? -
✔✔public pension funds
When screening possible investments, a venture capital firm might issue a SLOR, which
stands for: - ✔✔"standard letter of rejection"
When screening prospective new ventures, venture capital firms consider their own
funds' requirements. Which of the following is not one of the venture firm's
requirements relating to its own funds? - ✔✔probable stock listing exchange for the
mature venture
All of the following are typical issues addressed in a term sheet except: -
✔✔management fees
Which of the following is not a common characteristic of business incubators? -
✔✔they make equity investments in their client firms
Which of the following types of crowdfunding involves soliciting nonequity funds to
finance specific businessproducts and services or requesting donations for a specific
purpose? - ✔✔rewards-based crowdfunding
When assessing the creditworthiness of new entrepreneurs, lending institutions review
the "Five C's." The ability of the entrepreneur to repay borrowed funds is known as: -
✔✔capacity
