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
by J. Chris Leach, Ronald W. Melicher, Chapters 1 - 16,
Complete With CAPSTONE CASES

,TABLE OF CONTENTS SD SD SD




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 SD




INTRODUCTION TO FINANCE FOR ENTREPRENEURS SD SD SD SD




FOCUS

The purpose of this first chapter is to present an overview of what entrepreneurial finance is about. In doing s
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o we hope to convey to you the importance of understanding and applying entrepreneurial finance methods a
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nd tools to help ensure an entrepreneurial venture is successful.We present a life cycle approach to the teachi
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ng of entrepreneurial finance where we cover venture operating and financial decisions faced by the entrepre
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neur as a venture progresses from an idea through to harvesting the venture.
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LEARNING OBJECTIVES SD




LO 1.1: Characterize the entrepreneurial process.
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LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs.
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LO 1.3: Indicate several megatrends providing waves of entrepreneurial opportunities.LO 1.4: L
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ist and describe the seven principles of entrepreneurial finance.
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LO 1.5: Discuss entrepreneurial finance and the role of the financial manager.LO 1.6:
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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: U
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nderstand the life cycle approach used in this book.
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CHAPTER OUTLINE SD




1.1 THE ENTREPRENEURIAL PROCESS SD SD




1.2 ENTREPRENEURSHIP FUNDAMENTALS SD




A. Who is an Entrepreneur? SD SD SD




B. Basic Definitions SD




C. Entrepreneurial Traits or Characteristics SD SD SD




D. Opportunities Exist But Not Without Risks SD SD SD SD SD




1.3 SOURCES OF ENTREPRENEURIAL OPPORTUNITIES SD SD SD




A. Societal Changes SD




B. Demographic Changes SD




C. Technological Changes SD




D. Emerging Economies and Global Changes SD SD SD SD




E. Crises and ―Bubbles‖ SD SD




F. Disruptive Innovation SD




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, 1.4 PRINCIPLES OF ENTREPRENEURIAL FINANCE SD SD SD




A. Real, Human, and Financial Capital must be Rented from Owners (Principle #1)
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B. Risk and Expected Reward go Hand in Hand (Principle #2)
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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)
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E. A Venture‘s Financial Objective is to Increase Value (Principle #5)
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F. It is Dangerous to Assume that People Act Against Their Own Self-
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Interests(Principle #6) D
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G. Venture Character and Reputation can be Assets or Liabilities (Principle #7)
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1.5 ROLE OF ENTREPRENEURIAL FINANCE
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1.6 THE SUCCESSFUL VENTURE LIFE CYCLE
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A. Development Stage SD




B. Startup Stage SD




C. Survival Stage SD




D. Rapid-Growth Stage SD




E. Early-Maturity Stage SD




F. Life Cycle Stages and the Entrepreneurial Process
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1.7 FINANCING THROUGH THE VENTURE LIFE CYCLE SD SD SD SD SD




A. Seed Financing SD




B. Startup Financing SD




C. First-Round Financing SD




D. Second-Round Financing SD




E. Mezzanine Financing SD




F. Liquidity-Stage Financing SD




G. Seasoned Financing SD




1.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCESUMMARY
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DISCUSSION QUESTIONS AND ANSWERS SD SD SD




1. What is the entrepreneurial process?
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The entrepreneurial process comprises: developing opportunities, gathering resources, andmanaging
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and building operations with the goal of creating value.
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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 creatingvalue. Wh
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ile there is no prototypical entrepreneur, many are good at recognizing commercial opportunities, tend t
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o 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 businessesfail?
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