Entrepreneurship of financing for Startups MCQs
Entrepreneurship of financing for Startups MCQs
Try to answer these 20 Entrepreneurship of financing for Startups MCQs and check your understanding of the Entrepreneurship of financing for Startups subject.
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1: Tick Correct statement about Accredited Investors .
A. Investors who earn an annual income of more than $200,000 or have a net worth of more than $1 million.
B. A non-monetary investment that increases the value or ownership interest created by the investment of hard work for no compensation.
C. A crowdfunding model where backers do not expect any direct return for their donation or investment.
D. None of these
2: which type of investor who uses his or her own money to provide funds to young startup private businesses run by entrepreneurs who are neither friends nor family
A. Sweat Equity
B. Angel Investor
C. Accredited Investors
D. none of these
3: A short-term loan that can be turned into equity when future financing is issued.
A. Convertible Debt
B. Debt Financing
C. Debt Financing
D. None of these
4: Debt Financing that is expected to be paid back with interest at a designated point in the future.
A. True
B. False
5: process that involves evaluating an investment opportunity prior to the contract being signed is known as?
A. Due Diligence
B. Debt Financing
C. Debt Financing
D. All above
6: Early-Stage Financing is a stage of financing that involves ________ that have a team in place and a product or service tested or piloted, but have little or no revenue.
A. larger funds provided for employ
B. larger funds provided for Manager
C. larger funds provided for companies
D. No funds provided for companies
7: The sale of shares of stock in exchange for cash is known as?
A. Equity Financing
B. Initial Public Offering (IPO)
C. Debt Financing
D. Incorrect statement
8: A company’s first opportunity to sell stocks on the stock market to be purchased by members of the _______.
A. Specific Employ
B. General Employ
C. General public
D. Specific public
9: A stage of financing in which the money is provided to entrepreneurs to enable them to implement the idea by funding product research and development is known as?
A. Seed-Stage Financing
B. Startup Financing
C. Unicorn
D. None of these
10: Unicorn is a tech startup company that has received a ______ as determined by private or public investment.
A. $13 billion valuation
B. $1 billion valuation,
C. $10 billion valuation,
D. $21 billion valuation,
11: A type of professional investor who generally invests in early-stage and emerging companies because of perceived long-term growth potential is known as
A. Accounts Payable
B. Venture Capitalist (VC)
C. Startup Financing
D. Unicorn
12: _____ financing usually consists of small or modest amounts of capital provided to entrepreneurs to prove a concept.
A. Seed stage
B. Startup
C. Conceptual growth
D. Early-stage
13: A less common exit strategy that allows the entrepreneur an opportunity to repurchase stock from a venture capital firm at cost plus a premium is called ______.
A. market expansion
B. initial public offering
C. buyback
D. mergers and acquisitions
14: “What are the drivers that are fueling the growth?,” “How is the company positioned against competitive threats?,” and “What is the distribution channel and who controls it?” are questions associated with this step in the due diligence process.
A. market
B. product/service
C. finance
D. founders
15: Which of the following is true about angel investors?
A. After friends and family, angel investors represent around 50% of external equity raised by startups.
B. Angels generally provide “hands off” investment, allowing entrepreneurs freedom to operate their business as they best see fit.
C. Angels teach entrepreneurs valuable business strategies that go beyond funding.
D. Angels must have an annual income of over US$250,000 or a net worth of US$2 million.
16: ______ is a type of angel investor that has already successfully started and operated their own business, which they may or may not still be running.
A. Entrepreneurial angel
B. Professional angel
C. Corporate angel
D. Enthusiast angel
17: ______ financing consists of larger amounts of funds provided for companies that have a team in place and a product or service tested or piloted, but shows little or no revenue.
A. Seed stage
B. Startup
C. Conceptual growth
D. Early-stage
18: The founders of Google were willing to have little control over their company in exchange for financial gains that are close to potential. After this trade-off they would be classified as ______.
A. failure
B. king
C. rich
D. exception
19: Which of the following is the best definition of equity financing?
A. When an outsider provides a loan to a new venture.
B. Supporting a business financially in exchange for a reward if the company acquires enough financial backing.
C. The exchange of ownership interest in exchange for cash investment.
D. The acquisition of a partner venture through exchanging stock ownership.
20: ______ are individuals who are usually former business executives, often from big multinationals, looking to use their savings or current income to invest.
A. Entrepreneurial angels
B. Professional angels
C. Corporate angels
D. Enthusiast angels
21: Which of the following is true with respect to the financing process?
A. Most entrepreneurs are able to be profitable and maintain full control of their business.
B. Approximately 80% of entrepreneurs are forced to relinquish their CEO roles.
C. For the most part, entrepreneurs are able to get extensive financing while simultaneously maintaining control over their firm.
D. The transition from owner/CEO of a company to a lesser position is usually a smooth transition.
22: In which year did a financing rule allow pension funds to invest in venture capital for the first time?
A. 1958
B. 1979
C. 1999
D. 2007
23: What is the best definition of convertible debt?
A. Investment from a fund that typically goes through a 10-year cycle before distributed to its partner investors.
B. A short-term loan that can be turned into equity when future financing is issued.
C. Investment from informal investors who use their own money to provide funds to young startup businesses run by entrepreneurs who are neither friends nor family.
D. A loan at lower than market interest rate that includes an equity interest.
24: A type of professional investor who generally invests in early-stage and emerging companies because of perceived long-term growth potential is called a ______.
A. angel investor
B. venture capitalist
C. valuation investor
D. founder
25: ______ is a rigorous process which involves evaluating an investment opportunity prior to the contract being signed.
A. A non-disclosure agreement
B. A cool-down period
C. Market analysis
D. Due diligence
26: Which of the following is true about venture capitalists (VCs)?
A. The majority of VCs invest in startup businesses.
B. VCs will usually invest between US$100,000 and US$500,000.
C. VCs are generally not interested in seed-stage investments.
D. VCs tend to stay away from ventures that have received seed funding in the early stages.
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Entrepreneurship of financing for Startups MCQs
