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

,TABLE OF CONTENTS WS WS WS




Part 1: THE ENTREPRENEURIAL ENVIRONMENT.
WS WS WS WS




1. Introduction to
WS WS WS




Finance for Entrepreneurs.
WS WS




2. Developing the Business Idea.
WS WS WS WS




Part 2: ORGANIZING AND OPERATING THE VENTURE.
WS WS WS WS WS WS




3. Organizing and Financing a New Venture.
WS WS WS WS WS WS




4. Preparing and Using Financial Statements.
WS WS WS WS WS




5. Evaluating Operating and Financial Performance.
WS WS WS WS WS




Part 3: PLANNING FOR THE FUTURE.
WS WS WS WS WS




6. Managing Cash Flow.
WS WS WS




7. Types and Costs of Financial Capital.
WS WS WS WS WS WS




8. Securities Law Considerations When Obtaining Venture Financing.
WS WS WS WS WS WS WS




Part 4: CREATING AND RECOGNIZING VENTURE VALUE.
WS WS WS WS WS WS




9. Projecting Financial Statements.
WS WS WS




10. Valuing Early-Stage Ventures.
WS WS WS




11. Venture Capital Valuation Methods.
WS WS WS WS




Part 5: STRUCTURING FINANCING FOR THE GROWING VENTURE.
WS WS WS WS WS WS WS




12. Professional Venture Capital.
WS WS WS




13. Other Financing Alternatives.
WS WS WS




14. Security Structures and Determining Enterprise Values.
WS WS WS WS WS WS




Part 6: EXIT AND TURNAROUND STRATEGIES.
WS WS WS WS WS




15. Harvesting the Business Venture Investment.
WS WS WS WS WS




16. Financially Troubled Ventures: Turnaround Opportunities?
WS WS WS WS WS




Part 7: CAPSTONE CASES.
WS WS WS




Case 1. Eco-Products, Inc.
WS WS WS




Case 2. Spatial Technology,
WS WS WS WS

,Chapter 1 WS




INTRODUCTION TO FINANCE FOR ENTREPRENEURS WS WS WS WS




FOCUS

The purpose of this first chapter is to present an overview of what entrepreneurial finance is about. In doing
WS WS WS WS WS WS WS WS WS WS WS WS WS WS WS WS WS WS




so we hope to convey to you the importance of understanding and applying entrepreneurial finance method
WS WS WS WS WS WS WS WS WS WS WS WS WS WS WS WS




s and tools to help ensure an entrepreneurial venture is successful.We present a life cycle approach to the te
WS WS WS WS WS WS WS WS WS WS W
S WS WS WS WS WS WS WS WS




aching of entrepreneurial finance where we cover venture operating and financial decisions faced by the ent
WS WS WS WS WS WS WS WS WS WS WS WS WS WS WS




repreneur as a venture progresses from an idea through to harvesting the venture.
WS WS WS WS WS WS WS WS WS WS WS WS




LEARNING OBJECTIVES WS




LO 1.1: Characterize the entrepreneurial process.
WS WS WS WS WS




LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs.
WS WS WS WS WS WS WS WS




LO 1.3: Indicate several megatrends providing waves of entrepreneurial opportunities.LO 1.4:
WS WS WS WS WS WS WS WS WS W
S WS WS




List and describe the seven principles of entrepreneurial finance.
WS WS WS WS WS WS WS WS




LO 1.5: Discuss entrepreneurial finance and the role of the financial manager.LO 1.6:
WS WS WS WS WS WS WS WS WS WS WS W
S WS WS




Describe the various stages of a successful venture‘s life cycle.
WS WS WS WS WS WS WS WS WS




LO 1.7: Identify, by life cycle stage, the relevant types of financing and investors.LO 1.8:
WS WS WS WS WS WS WS WS WS WS WS WS WS W
S WS WS




Understand the life cycle approach used in this book.
WS WS WS WS WS WS WS WS




CHAPTER OUTLINE WS




1.1 THE ENTREPRENEURIAL PROCESS WS WS




1.2 ENTREPRENEURSHIP FUNDAMENTALS WS




A. Who is an Entrepreneur? WS WS WS




B. Basic Definitions WS




C. Entrepreneurial Traits or Characteristics WS WS WS




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




1.3 SOURCES OF ENTREPRENEURIAL OPPORTUNITIES WS WS WS




A. Societal Changes WS




B. Demographic Changes WS




C. Technological Changes WS




D. Emerging Economies and Global Changes WS WS WS WS




E. Crises and ―Bubbles‖ WS WS




F. Disruptive Innovation WS




1

, 1.4 PRINCIPLES OF ENTREPRENEURIAL FINANCE WS WS WS




A. Real, Human, and Financial Capital must be Rented from Owners (Principle #1)
WS WS WS WS WS WS WS WS WS WS WS




B. Risk and Expected Reward go Hand in Hand (Principle #2)
WS WS WS WS WS WS WS WS WS




C. While Accounting is the Language of Business, Cash is the Currency (Principle #3)
WS WS WS WS WS WS WS WS WS WS WS WS




D. New Venture Financing Involves Search, Negotiation, and Privacy (Principle #4)
WS WS WS WS WS WS WS WS WS




E. A Venture‘s Financial Objective is to Increase Value (Principle #5)
WS WS WS WS WS WS WS WS WS




F. It is Dangerous to Assume that People Act Against Their Own Self-
WS WS WS WS WS WS WS WS WS WS WS




Interests(Principle #6) W
S WS




G. Venture Character and Reputation can be Assets or Liabilities (Principle #7)
WS WS WS WS WS WS WS WS WS WS




1.5 ROLE OF ENTREPRENEURIAL FINANCE
WS WS WS




1.6 THE SUCCESSFUL VENTURE LIFE CYCLE
WS WS WS WS




A. Development Stage WS




B. Startup Stage WS




C. Survival Stage WS




D. Rapid-Growth Stage WS




E. Early-Maturity Stage WS




F. Life Cycle Stages and the Entrepreneurial Process
WS WS WS WS WS WS




1.7 FINANCING THROUGH THE VENTURE LIFE CYCLE WS WS WS WS WS




A. Seed Financing WS




B. Startup Financing WS




C. First-Round Financing WS




D. Second-Round Financing WS




E. Mezzanine Financing WS




F. Liquidity-Stage Financing WS




G. Seasoned Financing WS




1.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCESUMMAR
WS WS WS WS WS WS W
S




Y


DISCUSSION QUESTIONS AND ANSWERS WS WS WS




1. What is the entrepreneurial process?
WS WS WS WS




The entrepreneurial process comprises: developing opportunities, gathering resources, andmanaging
WS WS WS WS WS WS WS WS W
S




and building operations with the goal of creating value.
WS WS WS WS WS WS WS WS WS




2. What is entrepreneurship? What are some basic characteristics of entrepreneurs?
WS WS WS WS WS WS WS WS WS




Entrepreneurship is the process of changing ideas into commercial opportunities and creatingvalue. W
WS WS WS WS WS WS WS WS WS WS WS W
S W S




hile there is no prototypical entrepreneur, many are good at recognizing commercial opportunities, te
WS WS WS WS WS WS WS WS WS WS WS WS WS




nd to be optimistic, and envision a plan for the future.
WS WS WS WS WS WS WS WS WS WS




3. Why do businesses close or cease operating? What are the primary reasons why businessesfail?
WS WS WS WS WS WS WS WS WS WS WS WS WS SW