solution manual entrepreneurial finance, 7th edition j. chris leach, ronald w. melicher chapters 1 - 16 with capstone cases

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

,TABLELOFLCONTENTSL

PartL1:LTHELENTREPRENEURIALLENVIRONMENT.
1. IntroductionLtoLFinanceLforLEntrepreneurs.
2. DevelopingLtheLBusinessLIdea.
PartL2:LORGANIZINGLANDLOPERATINGLTHELVENTURE.
3. OrganizingLandLFinancingLaLNewLVenture.
4. PreparingLandLUsingLFinancialLStatements.
5. EvaluatingLOperatingLandLFinancialLPerformance.L Pa
rtL3:LPLANNINGLFORLTHELFUTURE.
6. ManagingLCashLFlow.
7. TypesLandLCostsLofLFinancialLCapital.
8. SecuritiesLLawLConsiderationsLWhenLObtainingLVentureLFinancing.L PartL
4:LCREATINGLANDLRECOGNIZINGLVENTURELVALUE.
9. ProjectingLFinancialLStatements.
10. ValuingLEarly-StageLVentures.
11. VentureLCapitalLValuationLMethods.
PartL5:LSTRUCTURINGLFINANCINGLFORLTHELGROWINGLVENTURE.
12. ProfessionalLVentureLCapital.
13. OtherLFinancingLAlternatives.
14. SecurityLStructuresLandLDeterminingLEnterpriseLValues.L PartL
6:LEXITLANDLTURNAROUNDLSTRATEGIES.
15. HarvestingLtheLBusinessLVentureLInvestment.
16. FinanciallyLTroubledLVentures:LTurnaroundLOpportunities?L PartL
7:LCAPSTONELCASES.
CaseL1.LEco-
Products,LInc.L CaseL2.LSpatialLT
echnology,

,ChapterL1
INTRODUCTIONLTOLFINANCELFORLENTREPRENEURSL FOCUS

TheLpurposeLofLthisLfirstLchapterLisLtoLpresentLanLoverviewLofLwhatLentrepreneurialLfinanceLisL
about.LInLdoingLsoLweLhopeLtoLconveyLtoLyouLtheLimportanceLofLunderstandingLandLapplying
L entrepreneurialLfinanceLmethodsLandLtoolsLtoLhelpLensureLanLentrepreneurialLventureLisL succ
essful.WeLpresentLaLlifeLcycleLapproachLtoLtheLteachingLofLentrepreneurialLfinanceLwhereL we
LcoverLventureLoperatingLandLfinancialLdecisionsLfacedLbyLtheLentrepreneurLasLaLventureL pro
gressesLfromLanLideaLthroughLtoLharvestingLtheLventure.

LEARNINGLOBJECTIVES

LOL1.1:LCharacterizeLtheLentrepreneurialLprocess.
LOL1.2:LDescribeLentrepreneurshipLandLsomeLcharacteristicsLofLentrepreneurs.L
LOL1.3:LIndicateLseveralLmegatrendsLprovidingLwavesLofLentrepreneurialL opp
ortunities.LOL1.4:LListLandLdescribeLtheLsevenLprinciplesLofLentrepreneurialL fin
ance.
LOL1.5:LDiscussLentrepreneurialLfinanceLandLtheLroleLofLtheLfinancialL manager
.LOL1.6:LDescribeLtheLvariousLstagesLofLaLsuccessfulLventure‘sLlifeL cycle.
LOL1.7:LIdentify,LbyLlifeLcycleLstage,LtheLrelevantLtypesLofLfinancingLandL inve
stors.LOL1.8:LUnderstandLtheLlifeLcycleLapproachLusedLinLthisLbook.

CHAPTERLOUTLINE

1.1 THELENTREPRENEURIALLPROCESS
1.2 ENTREPRENEURSHIPLFUNDAMENTALS
A. WhoLisLanLEntrepreneur?
B. BasicLDefinitions
C. EntrepreneurialLTraitsLorLCharacteristics
D. OpportunitiesLExistLButLNotLWithoutLRisks
1.3 SOURCESLOFLENTREPRENEURIALLOPPORTUNITIES
A. SocietalLChanges
B. DemographicLChanges
C. TechnologicalLChanges
D. EmergingLEconomiesLandLGlobalLChanges
E. CrisesLandL―Bubbles‖
F. DisruptiveLInnovation


1

, 1.4 PRINCIPLESLOFLENTREPRENEURIALLFINANCE
A. Real,LHuman,LandLFinancialLCapitalLmustLbeLRentedLfromLOwnersL(PrincipleL#1)
B. RiskLandLExpectedLRewardLgoLHandLinLHandL(PrincipleL#2)
C. WhileLAccountingLisLtheLLanguageLofLBusiness,LCashLisLtheLCurrencyL(PrincipleL#3)
D. NewLVentureLFinancingLInvolvesLSearch,LNegotiation,LandLPrivacyL(PrincipleL#4)
E. ALVenture‘sLFinancialLObjectiveLisLtoLIncreaseLValueL(PrincipleL#5)
F. ItLisLDangerousLtoLAssumeLthatLPeopleLActLAgainstLTheirLOwnLSelf-
L Interests(PrincipleL#6)
G. VentureLCharacterLandLReputationLcanLbeLAssetsLorLLiabilitiesL(PrincipleL#7)
1.5 ROLELOFLENTREPRENEURIALLFINANCE
1.6 THELSUCCESSFULLVENTURELLIFELCYCLE
A. DevelopmentLStage
B. StartupLStage
C. SurvivalLStage
D. Rapid-GrowthLStage
E. Early-MaturityLStage
F. LifeLCycleLStagesLandLtheLEntrepreneurialLProcess
1.7 FINANCINGLTHROUGHLTHELVENTURELLIFELCYCLE
A. SeedLFinancing
B. StartupLFinancing
C. First-RoundLFinancing
D. Second-RoundLFinancing
E. MezzanineLFinancing
F. Liquidity-StageLFinancing
G. SeasonedLFinancing
1.8 LIFELCYCLELAPPROACHLFORLTEACHINGLENTREPRENEURIALLFINANCEL SU
MMARY


DISCUSSIONLQUESTIONSLANDLANSWERS

1. WhatLisLtheLentrepreneurialLprocess?

TheLentrepreneurialLprocessLcomprises:LdevelopingLopportunities,LgatheringLresources,L andm
anagingLandLbuildingLoperationsLwithLtheLgoalLofLcreatingLvalue.

2. WhatLisLentrepreneurship?LWhatLareLsomeLbasicLcharacteristicsLofLentrepreneurs?

EntrepreneurshipLisLtheLprocessLofLchangingLideasLintoLcommercialLopportunitiesLandL creatin
gvalue.LLWhileLthereLisLnoLprototypicalLentrepreneur,LmanyLareLgoodLatLrecognizingL comm
ercialLopportunities,LtendLtoLbeLoptimistic,LandLenvisionLaLplanLforLtheLfuture.

3. WhyLdoLbusinessesLcloseLorLceaseLoperating?LWhatLareLtheLprimaryLreasonsLwhyLbusinesse
sL fail?