. - The Marketplace to Buy and Sell your Study Material
ty ty ty ty ty ty ty ty ty ty
SOLUTION MANUAL For Entrepreneurial Finance, 7th Edition
ty ty ty ty ty ty
ty by J. Chris Leach, Ronald W. Melicher, Chapters 1 -
ty ty ty ty ty ty ty ty ty
16, Complete With CAPSTONE CASES
ty tyty ty ty ty t y
Downloaded by: Bookista |
ty ty ty ty Want to earn $1.236
ty ty ty
Distribution of this document is illegal
ty ty ty ty ty extra per year?
ty ty
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
ty ty ty ty ty ty ty ty ty ty
TABLE OF CONTENTS ty ty
Part 1: THE ENTREPRENEURIAL ENVIRONMENT.
t y t y t y t y
1. Introduction to t y
Finance for Entrepreneurs. t y t y
2. Developing the Business Idea. t y t y t y
Part 2: ORGANIZING AND OPERATING THE VENTURE.
t y t y t y t y t y t y
3. Organizing and Financing a New Venture. t y t y t y t y t y
4. Preparing and Using Financial Statements. t y t y t y t y
5. Evaluating Operating and Financial Performance. ty ty ty ty
ty Part 3: PLANNING FOR THE FUTURE.
ty ty ty ty ty
6. Managing Cash Flow. ty ty
7. Types and Costs of Financial Capital. t y t y t y t y t y
8. Securities Law Considerations When Obtaining Venture Financin t y t y t y t y t y t y
g. Part 4: CREATING AND RECOGNIZING VENTURE VALUE.
ty ty ty ty ty ty ty
9. Projecting Financial Statements. t y t y
10. Valuing Early-Stage Ventures. ty ty
11. Venture Capital Valuation Methods. t y t y t y
Part 5: STRUCTURING FINANCING FOR THE GROWING VENTURE.
t y t y t y t y t y t y t y
12. Professional Venture Capital. t y t y
13. Other Financing Alternatives. t y t y
14. Security Structures and Determining Enterprise Values t y t y t y t y t y
. Part 6: EXIT AND TURNAROUND STRATEGIES.
ty ty ty ty ty ty
15. Harvesting the Business Venture Investment. t y t y t y t y
16. Financially Troubled Ventures: Turnaround Opportunities? ty ty ty ty t
yPart 7: CAPSTONE CASES.
ty ty ty
Case 1. Eco- t y t y
Products, Inc. Case 2. Spatial t y ty t y t y t y
Technology,
Downloaded by: Bookista |
ty ty ty ty Want to earn $1.236
ty ty ty
Distribution of this document is illegal
ty ty ty ty ty extra per year?
ty ty
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
ty ty ty ty ty ty ty ty ty ty
Chapter 1 ty
INTRODUCTION TO FINANCE FOR ENTREPRENEURS t y t y t y t y ty
FOCUS
The purpose of this first chapter is to present an overview of what entrepreneurial finance is ab
ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty
out. In doing so we hope to convey to you the importance of understanding and applying entrep
ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty
reneurial finance methods and tools to help ensure an entrepreneurial venture is successful. We pre
ty ty ty ty ty ty ty ty ty ty ty ty ty ty
sent a life cycle approach to the teaching of entrepreneurial finance where we cover venture ope
ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty
rating and financial decisions faced by the entrepreneur as a venture progresses from an idea thro
ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty
ugh to harvesting the venture.
ty ty ty ty
LEARNING OBJECTIVES ty
LO 1.1: Characterize the entrepreneurial process.
ty ty ty ty ty
LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs.
ty ty ty ty ty ty ty ty
LO 1.3: Indicate several megatrends providing waves of entrepreneurial opportunities.
ty ty ty ty ty ty ty ty ty ty
LO 1.4: List and describe the seven principles of entrepreneurial finance.
ty ty ty ty ty ty ty ty ty ty
LO 1.5: Discuss entrepreneurial finance and the role of the financial manager.
ty ty ty ty ty ty ty ty ty ty ty ty
LO 1.6: Describe the various stages of a successful venture‗s life cycle.
ty ty ty ty ty ty ty ty ty ty ty
LO 1.7: Identify, by life cycle stage, the relevant types of financing and investors. L
ty ty ty ty ty ty ty ty ty ty ty ty ty ty
O 1.8: Understand the life cycle approach used in this book.
ty ty ty ty ty ty ty ty ty ty
CHAPTER OUTLINE t y
16.1 THE ENTREPRENEURIAL PROCESS t y t y
16.2 ENTREPRENEURSHIP FUNDAMENTALS t y
A. Who is an Entrepreneur? ty ty ty
B. Basic Definitions ty
C. Entrepreneurial Traits or Characteristics ty ty ty
D. Opportunities Exist But Not Without Risks ty ty ty ty ty
16.3SOURCES OF ENTREPRENEURIAL OPPORTUNITIES t y ty ty
A. Societal Changes ty
B. Demographic Changes t y
C. Technological Changes ty
D. Emerging Economies and Global Changes t y t y t y t y
E. Crises and ―Bubbles‖ ty ty
F. Disruptive Innovation t y
1
Downloaded by: Bookista | ty ty ty ty Want to earn $1.236
ty ty ty
Distribution of this document is illegal ty ty ty ty ty extra per year? ty ty
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
ty ty ty ty ty ty ty ty ty ty
16.4 PRINCIPLES OF ENTREPRENEURIAL FINANCE t y t y t y
A. Real, Human, and Financial Capital must be Rented from Owners (Principle #1)
ty ty ty ty ty ty ty ty ty ty ty
B. Risk and Expected Reward go Hand in Hand (Principle #2)
ty ty ty ty ty ty ty ty ty
C. While Accounting is the Language of Business, Cash is the Currency (Principle #3)
t y t y t y t y t y t y t y t y t y t y t y t y
D. New Venture Financing Involves Search, Negotiation, and Privacy (Principle #4)
t y t y t y t y t y t y t y t y t y
E. A Venture‗s Financial Objective is to Increase Value (Principle #5)
t y t y t y t y t y t y t y t y t y
F. It is Dangerous to Assume that People Act Against Their Own Self-
ty ty ty ty ty ty ty ty ty ty ty
Interests (Principle #6) ty t y
G. Venture Character and Reputation can be Assets or Liabilities (Principle #7)
ty ty ty ty ty ty ty ty ty ty
16.5 ROLE OF ENTREPRENEURIAL FINANCE
ty ty ty
16.6 THE SUCCESSFUL VENTURE LIFE CYCLE
t y t y t y t y
A. Development Stage t y
B. Startup Stage ty
C. Survival Stage t y
D. Rapid-Growth Stage t y
E. Early-Maturity Stage ty
F. Life Cycle Stages and the Entrepreneurial Process
t y t y t y t y t y t y
16.7 FINANCING THROUGH THE VENTURE LIFE CYCLE ty t y t y t y t y
A. Seed Financing t y
B. Startup Financing ty
C. First-Round Financing t y
D. Second-Round Financing t y
E. Mezzanine Financing t y
F. Liquidity-Stage Financing t y
G. Seasoned Financing ty
16.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCE
ty ty ty ty ty ty ty
SUMMARY
DISCUSSION QUESTIONS AND ANSWERS t y t y t y
1. What is the entrepreneurial process?
t y t y t y t y
The entrepreneurial process comprises: developing opportunities, gathering resources, and managi
ty ty ty ty ty ty ty ty ty
ng and building operations with the goal of creating value.
ty ty ty ty ty ty ty ty ty
2. What is entrepreneurship? What are some basic characteristics of entrepreneurs?
ty ty ty ty ty ty ty ty ty
Entrepreneurship is the process of changing ideas into commercial opportunities and creating v
ty ty ty ty ty ty ty ty ty ty ty ty
alue.
While there is no prototypical entrepreneur, many are good at recognizing commercial
ty ty ty ty ty ty ty ty ty ty ty ty
opportunities, tend to be optimistic, and envision a plan for the future.
ty ty ty ty ty ty ty ty ty ty ty
3. Why do businesses close or cease operating? What are the primary reasons why businessesfail?
ty ty ty ty ty ty ty ty ty ty ty ty ty
Downloaded by: Bookista | ty ty ty ty Want to earn $1.236
ty ty ty
Distribution of this document is illegal ty ty ty ty ty extra per year? ty ty
ty ty ty ty ty ty ty ty ty ty
SOLUTION MANUAL For Entrepreneurial Finance, 7th Edition
ty ty ty ty ty ty
ty by J. Chris Leach, Ronald W. Melicher, Chapters 1 -
ty ty ty ty ty ty ty ty ty
16, Complete With CAPSTONE CASES
ty tyty ty ty ty t y
Downloaded by: Bookista |
ty ty ty ty Want to earn $1.236
ty ty ty
Distribution of this document is illegal
ty ty ty ty ty extra per year?
ty ty
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
ty ty ty ty ty ty ty ty ty ty
TABLE OF CONTENTS ty ty
Part 1: THE ENTREPRENEURIAL ENVIRONMENT.
t y t y t y t y
1. Introduction to t y
Finance for Entrepreneurs. t y t y
2. Developing the Business Idea. t y t y t y
Part 2: ORGANIZING AND OPERATING THE VENTURE.
t y t y t y t y t y t y
3. Organizing and Financing a New Venture. t y t y t y t y t y
4. Preparing and Using Financial Statements. t y t y t y t y
5. Evaluating Operating and Financial Performance. ty ty ty ty
ty Part 3: PLANNING FOR THE FUTURE.
ty ty ty ty ty
6. Managing Cash Flow. ty ty
7. Types and Costs of Financial Capital. t y t y t y t y t y
8. Securities Law Considerations When Obtaining Venture Financin t y t y t y t y t y t y
g. Part 4: CREATING AND RECOGNIZING VENTURE VALUE.
ty ty ty ty ty ty ty
9. Projecting Financial Statements. t y t y
10. Valuing Early-Stage Ventures. ty ty
11. Venture Capital Valuation Methods. t y t y t y
Part 5: STRUCTURING FINANCING FOR THE GROWING VENTURE.
t y t y t y t y t y t y t y
12. Professional Venture Capital. t y t y
13. Other Financing Alternatives. t y t y
14. Security Structures and Determining Enterprise Values t y t y t y t y t y
. Part 6: EXIT AND TURNAROUND STRATEGIES.
ty ty ty ty ty ty
15. Harvesting the Business Venture Investment. t y t y t y t y
16. Financially Troubled Ventures: Turnaround Opportunities? ty ty ty ty t
yPart 7: CAPSTONE CASES.
ty ty ty
Case 1. Eco- t y t y
Products, Inc. Case 2. Spatial t y ty t y t y t y
Technology,
Downloaded by: Bookista |
ty ty ty ty Want to earn $1.236
ty ty ty
Distribution of this document is illegal
ty ty ty ty ty extra per year?
ty ty
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
ty ty ty ty ty ty ty ty ty ty
Chapter 1 ty
INTRODUCTION TO FINANCE FOR ENTREPRENEURS t y t y t y t y ty
FOCUS
The purpose of this first chapter is to present an overview of what entrepreneurial finance is ab
ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty
out. In doing so we hope to convey to you the importance of understanding and applying entrep
ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty
reneurial finance methods and tools to help ensure an entrepreneurial venture is successful. We pre
ty ty ty ty ty ty ty ty ty ty ty ty ty ty
sent a life cycle approach to the teaching of entrepreneurial finance where we cover venture ope
ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty
rating and financial decisions faced by the entrepreneur as a venture progresses from an idea thro
ty ty ty ty ty ty ty ty ty ty ty ty ty ty ty
ugh to harvesting the venture.
ty ty ty ty
LEARNING OBJECTIVES ty
LO 1.1: Characterize the entrepreneurial process.
ty ty ty ty ty
LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs.
ty ty ty ty ty ty ty ty
LO 1.3: Indicate several megatrends providing waves of entrepreneurial opportunities.
ty ty ty ty ty ty ty ty ty ty
LO 1.4: List and describe the seven principles of entrepreneurial finance.
ty ty ty ty ty ty ty ty ty ty
LO 1.5: Discuss entrepreneurial finance and the role of the financial manager.
ty ty ty ty ty ty ty ty ty ty ty ty
LO 1.6: Describe the various stages of a successful venture‗s life cycle.
ty ty ty ty ty ty ty ty ty ty ty
LO 1.7: Identify, by life cycle stage, the relevant types of financing and investors. L
ty ty ty ty ty ty ty ty ty ty ty ty ty ty
O 1.8: Understand the life cycle approach used in this book.
ty ty ty ty ty ty ty ty ty ty
CHAPTER OUTLINE t y
16.1 THE ENTREPRENEURIAL PROCESS t y t y
16.2 ENTREPRENEURSHIP FUNDAMENTALS t y
A. Who is an Entrepreneur? ty ty ty
B. Basic Definitions ty
C. Entrepreneurial Traits or Characteristics ty ty ty
D. Opportunities Exist But Not Without Risks ty ty ty ty ty
16.3SOURCES OF ENTREPRENEURIAL OPPORTUNITIES t y ty ty
A. Societal Changes ty
B. Demographic Changes t y
C. Technological Changes ty
D. Emerging Economies and Global Changes t y t y t y t y
E. Crises and ―Bubbles‖ ty ty
F. Disruptive Innovation t y
1
Downloaded by: Bookista | ty ty ty ty Want to earn $1.236
ty ty ty
Distribution of this document is illegal ty ty ty ty ty extra per year? ty ty
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
ty ty ty ty ty ty ty ty ty ty
16.4 PRINCIPLES OF ENTREPRENEURIAL FINANCE t y t y t y
A. Real, Human, and Financial Capital must be Rented from Owners (Principle #1)
ty ty ty ty ty ty ty ty ty ty ty
B. Risk and Expected Reward go Hand in Hand (Principle #2)
ty ty ty ty ty ty ty ty ty
C. While Accounting is the Language of Business, Cash is the Currency (Principle #3)
t y t y t y t y t y t y t y t y t y t y t y t y
D. New Venture Financing Involves Search, Negotiation, and Privacy (Principle #4)
t y t y t y t y t y t y t y t y t y
E. A Venture‗s Financial Objective is to Increase Value (Principle #5)
t y t y t y t y t y t y t y t y t y
F. It is Dangerous to Assume that People Act Against Their Own Self-
ty ty ty ty ty ty ty ty ty ty ty
Interests (Principle #6) ty t y
G. Venture Character and Reputation can be Assets or Liabilities (Principle #7)
ty ty ty ty ty ty ty ty ty ty
16.5 ROLE OF ENTREPRENEURIAL FINANCE
ty ty ty
16.6 THE SUCCESSFUL VENTURE LIFE CYCLE
t y t y t y t y
A. Development Stage t y
B. Startup Stage ty
C. Survival Stage t y
D. Rapid-Growth Stage t y
E. Early-Maturity Stage ty
F. Life Cycle Stages and the Entrepreneurial Process
t y t y t y t y t y t y
16.7 FINANCING THROUGH THE VENTURE LIFE CYCLE ty t y t y t y t y
A. Seed Financing t y
B. Startup Financing ty
C. First-Round Financing t y
D. Second-Round Financing t y
E. Mezzanine Financing t y
F. Liquidity-Stage Financing t y
G. Seasoned Financing ty
16.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCE
ty ty ty ty ty ty ty
SUMMARY
DISCUSSION QUESTIONS AND ANSWERS t y t y t y
1. What is the entrepreneurial process?
t y t y t y t y
The entrepreneurial process comprises: developing opportunities, gathering resources, and managi
ty ty ty ty ty ty ty ty ty
ng and building operations with the goal of creating value.
ty ty ty ty ty ty ty ty ty
2. What is entrepreneurship? What are some basic characteristics of entrepreneurs?
ty ty ty ty ty ty ty ty ty
Entrepreneurship is the process of changing ideas into commercial opportunities and creating v
ty ty ty ty ty ty ty ty ty ty ty ty
alue.
While there is no prototypical entrepreneur, many are good at recognizing commercial
ty ty ty ty ty ty ty ty ty ty ty ty
opportunities, tend to be optimistic, and envision a plan for the future.
ty ty ty ty ty ty ty ty ty ty ty
3. Why do businesses close or cease operating? What are the primary reasons why businessesfail?
ty ty ty ty ty ty ty ty ty ty ty ty ty
Downloaded by: Bookista | ty ty ty ty Want to earn $1.236
ty ty ty
Distribution of this document is illegal ty ty ty ty ty extra per year? ty ty
