Solution Manual for Entrepreneurial Finance 7th Edition | J. Chris Leach & Ronald W. Melicher

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




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 B




INTRODUCTIONBTOBFINANCEBFORBENTREPRENEURS

FOCUS

TheBpurposeBofBthisBfirstBchapterBisBtoBpresentBanBoverviewBofBwhatBentrepreneurialBfinanceBisBabout.BInBdoingB
soBweBhopeBtoBconveyBtoByouBtheBimportanceBofBunderstandingBandBapplyingBentrepreneurialBfinanceBmethods
BandBtoolsBtoBhelpBensureBanBentrepreneurialBventureBisBsuccessful.B
WeBpresentBaBlifeBcycleBapproachBtoBtheBtea
chingBofBentrepreneurialBfinanceBwhereBweBcoverBventureBoperatingBandBfinancialBdecisionsBfacedBbyBtheBentre
preneurBasBaBventureBprogressesBfromBanBideaBthroughBtoBharvestingBtheBventure.

LEARNINGBOBJECTIVES

LOB1.1:BCharacterizeBtheBentrepreneurialBprocess.
LOB1.2:BDescribeBentrepreneurshipBandBsomeBcharacteristicsBofBentrepreneurs.
LOB1.3:BIndicateBseveralBmegatrendsBprovidingBwavesBofBentrepreneurialBopportunities.BLOB1.4:B
ListBandBdescribeBtheBsevenBprinciplesBofBentrepreneurialBfinance.
LOB1.5:BDiscussBentrepreneurialBfinanceBandBtheBroleBofBtheBfinancialBmanager.BLOB1.6:B
DescribeBtheBvariousBstagesBofBaBsuccessfulBventure‘sBlifeBcycle.
LOB1.7:BIdentify,BbyBlifeBcycleBstage,BtheBrelevantBtypesBofBfinancingBandBinvestors.BLOB1.8:B
UnderstandBtheBlifeBcycleBapproachBusedBinBthisBbook.

CHAPTERBOUTLINE

1.1 THEBENTREPRENEURIALBPROCESS
1.2 ENTREPRENEURSHIPBFUNDAMENTALS
A. WhoBisBanBEntrepreneur?
B. BasicBDefinitions
C. EntrepreneurialBTraitsBorBCharacteristics
D. OpportunitiesBExistBButBNotBWithoutBRisks
1.3 SOURCESBOFBENTREPRENEURIALBOPPORTUNITIES
A. SocietalBChanges
B. DemographicBChanges
C. TechnologicalBChanges
D. EmergingBEconomiesBandBGlobalBChanges
E. CrisesBandB―Bubbles‖
F. DisruptiveBInnovation


1

, 1.4 PRINCIPLESBOFBENTREPRENEURIALBFINANCE
A. Real,BHuman,BandBFinancialBCapitalBmustBbeBRentedBfromBOwnersB(PrincipleB#1)
B. RiskBandBExpectedBRewardBgoBHandBinBHandB(PrincipleB#2)
C. WhileBAccountingBisBtheBLanguageBofBBusiness,BCashBisBtheBCurrencyB(PrincipleB#3)
D. NewBVentureBFinancingBInvolvesBSearch,BNegotiation,BandBPrivacyB(PrincipleB#4)
E. ABVenture‘sBFinancialBObjectiveBisBtoBIncreaseBValueB(PrincipleB#5)
F. ItBisBDangerousBtoBAssumeBthatBPeopleBActBAgainstBTheirBOwnBSelf-
InterestsB(PrincipleB#6)
G. VentureBCharacterBandBReputationBcanBbeBAssetsBorBLiabilitiesB(PrincipleB#7)
1.5 ROLEBOFBENTREPRENEURIALBFINANCE
1.6 THEBSUCCESSFULBVENTUREBLIFEBCYCLE
A. DevelopmentBStage
B. StartupBStage
C. SurvivalBStage
D. Rapid-GrowthBStage
E. Early-MaturityBStage
F. LifeBCycleBStagesBandBtheBEntrepreneurialBProcess
1.7 FINANCINGBTHROUGHBTHEBVENTUREBLIFEBCYCLE
A. SeedBFinancing
B. StartupBFinancing
C. First-RoundBFinancing
D. Second-RoundBFinancing
E. MezzanineBFinancing
F. Liquidity-StageBFinancing
G. SeasonedBFinancing
1.8 LIFEBCYCLEBAPPROACHBFORBTEACHINGBENTREPRENEURIALBFINANCEBSUMMAR
Y


DISCUSSIONBQUESTIONSBANDBANSWERS

1. WhatBisBtheBentrepreneurialBprocess?

TheBentrepreneurialBprocessBcomprises:BdevelopingBopportunities,BgatheringBresources,BandBmanaging
BandBbuildingBoperationsBwithBtheBgoalBofBcreatingBvalue.




2. WhatBisBentrepreneurship?BWhatBareBsomeBbasicBcharacteristicsBofBentrepreneurs?

EntrepreneurshipBisBtheBprocessBofBchangingBideasBintoBcommercialBopportunitiesBandBcreatingBvalue.B W
hileBthereBisBnoBprototypicalBentrepreneur,BmanyBareBgoodBatBrecognizingBcommercialBopportunities,Bten
dBtoBbeBoptimistic,BandBenvisionBaBplanBforBtheBfuture.

3. WhyBdoBbusinessesBcloseBorBceaseBoperating?BWhatBareBtheBprimaryBreasonsBwhyBbusinessesBfail?