FIN 300 Final Exam Question and
answers already passed 2025
Bootstrapping - correct answer ✔The process by which many entrepreneurs
raise seed money to obtain other resources necessary to start their business.
Seed financing - correct answer ✔is a form of securities offering in which an
investor invests capital in exchange for an equity stake in the company and
include friends and family funding, angel funding, and crowdfunding.
Venture Capital - correct answer ✔are individuals or firms that help new
businesses get started and provide much of their early-stage financing.
Usually only last one to two years.
Angels (Angel lnvestors) - correct answer ✔Wealthy individuals who invest
their own money in new ventures.
Reasons why Venture Capital funding is different - correct answer
✔entrepreneurs have only limited access to traditional sources of funding
Staged funding - correct answer ✔each funding stage gives the venture
capitalist an opportunity to reassess the management team and the firm's
financial performance
The venture capitalists' investments give them an equity interest in the
company, typically in the form of convertible preferred stock
Personal investment - correct answer ✔financial investment by a person,
rather than by a business or a financial institution, or these investments
considered as a whole
, Venture capitalists often require an entrepreneur to make a substantial
personal investment in the business
Syndication - correct answer ✔the transfer of something for control or
management by a group of individuals or organizations.
It is a common practice to syndicate seed and early-stage venture capital
investments
Occurs when the originating venture capitalist sells a percentage of a deal to
other venture capitalists
Reduces risk in two ways:
--Increases the diversification of the originating venture capitalist's investment
portfolio
--The willingness of other venture capitalists to share in the investment
provides independent corroboration that the investment is a reasonable
decision
Exit Strategy - correct answer ✔Venture capitalists are not long-term
investors in the companies, but usually exit over a period of three to seven
years
Every venture capital agreement includes provisions identifying who has the
authority to make critical decisions concerning the exit process
Exit strategy provisions usually include the following:
answers already passed 2025
Bootstrapping - correct answer ✔The process by which many entrepreneurs
raise seed money to obtain other resources necessary to start their business.
Seed financing - correct answer ✔is a form of securities offering in which an
investor invests capital in exchange for an equity stake in the company and
include friends and family funding, angel funding, and crowdfunding.
Venture Capital - correct answer ✔are individuals or firms that help new
businesses get started and provide much of their early-stage financing.
Usually only last one to two years.
Angels (Angel lnvestors) - correct answer ✔Wealthy individuals who invest
their own money in new ventures.
Reasons why Venture Capital funding is different - correct answer
✔entrepreneurs have only limited access to traditional sources of funding
Staged funding - correct answer ✔each funding stage gives the venture
capitalist an opportunity to reassess the management team and the firm's
financial performance
The venture capitalists' investments give them an equity interest in the
company, typically in the form of convertible preferred stock
Personal investment - correct answer ✔financial investment by a person,
rather than by a business or a financial institution, or these investments
considered as a whole
, Venture capitalists often require an entrepreneur to make a substantial
personal investment in the business
Syndication - correct answer ✔the transfer of something for control or
management by a group of individuals or organizations.
It is a common practice to syndicate seed and early-stage venture capital
investments
Occurs when the originating venture capitalist sells a percentage of a deal to
other venture capitalists
Reduces risk in two ways:
--Increases the diversification of the originating venture capitalist's investment
portfolio
--The willingness of other venture capitalists to share in the investment
provides independent corroboration that the investment is a reasonable
decision
Exit Strategy - correct answer ✔Venture capitalists are not long-term
investors in the companies, but usually exit over a period of three to seven
years
Every venture capital agreement includes provisions identifying who has the
authority to make critical decisions concerning the exit process
Exit strategy provisions usually include the following:
