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

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ChapterQ1
INTRODUCTIONQTOQFINANCEQFORQENTREPRENEURS

FOCUS

TheQpurposeQofQthisQfirstQchapterQisQtoQpresentQanQoverviewQofQwhatQentrepreneurialQfin
anceQisQabout.Q InQdoingQsoQweQhopeQtoQconveyQtoQyouQtheQimportanceQofQunderstandin
gQandQapplyingQentrepreneurialQfinanceQmethodsQandQtoolsQtoQhelpQensureQanQentreprene
urialQventureQisQsuccessful.QWeQpresentQaQlifeQcycleQapproachQtoQtheQteachingQofQentrep
reneurialQfinanceQwhereQweQcoverQventureQoperatingQandQfinancialQdecisionsQfacedQbyQth
eQentrepreneurQasQaQventureQprogressesQfromQanQideaQthroughQtoQharvestingQtheQventure.

LEARNINGQOBJECTIVES

LOQ1.1:QCharacterizeQtheQentrepreneurialQprocess.
LOQ1.2:QDescribeQentrepreneurshipQandQsomeQcharacteristicsQofQentrepreneurs.
LOQ1.3:QIndicateQseveralQmegatrendsQprovidingQwavesQofQentrepreneurialQopport
unities.QLOQ1.4:QListQandQdescribeQtheQsevenQprinciplesQofQentrepreneurialQfina
nce.
LOQ1.5:QDiscussQentrepreneurialQfinanceQandQtheQroleQofQtheQfinancialQm
anager.QLOQ1.6:QDescribeQtheQvariousQstagesQofQaQsuccessfulQventure‘sQl
ifeQcycle.
LOQ1.7:QIdentify,QbyQlifeQcycleQstage,QtheQrelevantQtypesQofQfinancingQandQ
investors.QLOQ1.8:QUnderstandQtheQlifeQcycleQapproachQusedQinQthisQbook.

CHAPTERQOUTLINE

1.1 THEQENTREPRENEURIALQPROCESS
1.2 ENTREPRENEURSHIPQFUNDAMENTALS
A. WhoQisQanQEntrepreneur?
B. BasicQDefinitions
C. EntrepreneurialQTraitsQorQCharacteristics
D. OpportunitiesQExistQButQNotQWithoutQRisks
1.3 SOURCESQOFQENTREPRENEURIALQOPPORTUNITIES
A. SocietalQChanges
B. DemographicQChanges
C. TechnologicalQChanges
D. EmergingQEconomiesQandQGlobalQChanges
E. CrisesQandQ―Bubbles‖
F. DisruptiveQInnovation


1
1.4 PRINCIPLESQOFQENTREPRENEURIALQFINANCE
A. Real,QHuman,QandQFinancialQCapitalQmustQbeQRentedQfromQOwnersQ(PrincipleQ#1)
B. RiskQandQExpectedQRewardQgoQHandQinQHandQ(PrincipleQ#2)
C. WhileQAccountingQisQtheQLanguageQofQBusiness,QCashQisQtheQCurrencyQ(Principle
Q#3)
D. NewQVentureQFinancingQInvolvesQSearch,QNegotiation,QandQPrivacyQ(PrincipleQ#4)

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E. AQVenture‘sQFinancialQObjectiveQisQtoQIncreaseQValueQ(PrincipleQ#5)
F. ItQisQDangerousQtoQAssumeQthatQPeopleQActQAgainstQTheirQOwnQSelf
-InterestsQ(PrincipleQ#6)
G. VentureQCharacterQandQReputationQcanQbeQAssetsQorQLiabilitiesQ(PrincipleQ#7)
1.5 ROLEQOFQENTREPRENEURIALQFINANCE
1.6 THEQSUCCESSFULQVENTUREQLIFEQCYCLE
A. DevelopmentQStage
B. StartupQStage
C. SurvivalQStage
D. Rapid-GrowthQStage
E. Early-MaturityQStage
F. LifeQCycleQStagesQandQtheQEntrepreneurialQProcess
1.7 FINANCINGQTHROUGHQTHEQVENTUREQLIFEQCYCLE
A. SeedQFinancing
B. StartupQFinancing
C. First-RoundQFinancing
D. Second-RoundQFinancing
E. MezzanineQFinancing
F. Liquidity-StageQFinancing
G. SeasonedQFinancing
1.8 LIFEQCYCLEQAPPROACHQFORQTEACHINGQENTREPRENEURIALQFINA
NCEQSUMMARY


DISCUSSIONQQUESTIONSQANDQANSWERS

1. WhatQisQtheQentrepreneurialQprocess?

TheQentrepreneurialQprocessQcomprises:QdevelopingQopportunities,QgatheringQresources,Qand
QmanagingQandQbuildingQoperationsQwithQtheQgoalQofQcreatingQvalue.

2. WhatQisQentrepreneurship?Q WhatQareQsomeQbasicQcharacteristicsQofQentrepreneurs?

EntrepreneurshipQisQtheQprocessQofQchangingQideasQintoQcommercialQopportunitiesQand
QcreatingQvalue.Q WhileQthereQisQnoQprototypicalQentrepreneur,QmanyQareQgoodQatQre
cognizingQcommercialQopportunities,QtendQtoQbeQoptimistic,QandQenvisionQaQplanQforQ
theQfuture.

3. WhyQdoQbusinessesQcloseQorQceaseQoperating?Q WhatQareQtheQprimaryQreasonsQwhy
QbusinessesQfail?