Solution Manual for Entrepreneurial Finance 7th Edition Leach / All Chapters 1 - 16 / Full Complete 2023

SOLUTIONMANUAL b




EntrepreneurialFinance,7thEdition b b b




J.ChrisLeach,RonaldW.Melicher
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Chapters1-16WithCAPSTONE CASES
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,TABLE OF CONTENTS b b b




Part 1:THE ENTREPRENEURIAL ENVIRONMENT.
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1. Introductionto Finance for Entrepreneurs. b b b b




2. Developingthe Business Idea. b b b




Part 2: ORGANIZING AND OPERATING THE VENTURE.
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3. Organizing andFinancing a New Venture. b b b b b




4. PreparingandUsing Financial Statements. b b b b




5. EvaluatingOperatingandFinancial Performance. Part 3: b b b b b b




PLANNING FOR THE FUTURE.
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6. Managing Cash Flow. b b




7. Types and Costs of Financial Capital.
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8. Securities Law ConsiderationsWhenObtainingVenture Financing. Part 4:
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CREATING AND RECOGNIZING VENTURE VALUE.
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9. ProjectingFinancialStatements. b b




10. ValuingEarly-StageVentures. b b




11. Venture CapitalValuationMethods. b b b




Part 5: STRUCTURING FINANCING FOR THE GROWING VENTURE.
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12. ProfessionalVentureCapital. b b




13. OtherFinancingAlternatives.
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14. SecurityStructuresandDeterminingEnterprise Values. Part 6:
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EXIT AND TURNAROUND STRATEGIES.
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15. Harvestingthe BusinessVentureInvestment. b b b b




16. FinanciallyTroubledVentures:TurnaroundOpportunities? Part 7: b b b b b b




CAPSTONE CASES.
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Case 1. Eco-Products, Inc. Case 2.
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SpatialTechnology,
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,Chapter 1 b




INTRODUCTION TO FINANCE FOR ENTREPRENEURS FOCUS b b b b b




The purpose of this first chapter is to present an overview of what entrepreneurial finance is about. In
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doing so we hope to convey to you the importance of understanding and applying entrepreneurial
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finance methods and tools to help ensure an entrepreneurial venture is successful.We present a life
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cycle approach to the teaching of entrepreneurial finance where we cover venture operating and
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financial decisions faced by the entrepreneur as a venture progresses from an idea through to
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harvesting the venture.
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LEARNINGOBJECTIVES b




LO 1.1: Characterize the entrepreneurial process.
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LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs. LO
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1.3: Indicate several megatrends providing waves of entrepreneurial
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bopportunities.LO 1.4: List and describe the seven principles of entrepreneurial b b b b b b b b b




bfinance.
LO 1.5: Discuss entrepreneurial finance and the role of the financial manager.LO
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1.6: Describe the various stages of asuccessful venture‘s life cycle.
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LO 1.7: Identify, by life cycle stage, the relevant types of financing and investors.LO
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1.8: Understand the life cycle approach used in this book.
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CHAPTEROUTLINE b




1.1 THE ENTREPRENEURIALPROCESS b b




1.2 ENTREPRENEURSHIPFUNDAMENTALS b




A. Who is an Entrepreneur? b b b




B. Basic Definitions b




C. Entrepreneurial Traits or Characteristics b b b




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




1.3 SOURCES OF ENTREPRENEURIALOPPORTUNITIES b b b




A. Societal Changes b




B. DemographicChanges b




C. Technological Changes b




D. EmergingEconomies and Global Changes b b b b




E. Crises and ―Bubbles‖ b b




F. Disruptive Innovation b




1

, 1.4 PRINCIPLES OF ENTREPRENEURIAL FINANCE b b b




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)
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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 SUCCESSFULVENTURE LIFE CYCLE
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A. DevelopmentStage b




B. Startup Stage b




C. Survival Stage b




D. Rapid-GrowthStage b




E. Early-MaturityStage b




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




A. Seed Financing b




B. Startup Financing b




C. First-RoundFinancing b




D. Second-RoundFinancing b




E. Mezzanine Financing b




F. Liquidity-StageFinancing b




G. Seasoned Financing b




1.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCE
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SUMMARY
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DISCUSSION QUESTIONS AND ANSWERS b b b




1. What is the entrepreneurial process?
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The entrepreneurial process comprises: developing opportunities, gathering resources,
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bandmanaging 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
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bcreatingvalue. While there is no prototypical entrepreneur, many are good at recognizing
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bcommercial opportunities, tend to 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 businesses fail?
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