1. Which of the following is the most important thing that an entrepreneur, or team of entrepreneurs, can do to build a strong ethical culture in their organization?
Implement an ethics training program
write a mission statement
lead by example
hire an ethics compliance officer
A _______ is a formal statement of an organization's values on certain ethical and social issues.
code of conduct
code of behavior
code of performance
code of principles
code of morals
"Don't be evil" is the corporate motto for:
Most founders' agreements include a _____, which legally obligates the departing founder to sell to the remaining founders his or her interest in the firm if the remaining founders are interested.
statutory purchase clause
voluntary recoup clause
shareholder surrender clause
Which of the following is typically not included in the founder's agreement for a firm?
a marketing plan
legal form of business ownership
apportionment of stock
identity and proposed titles of founders
A(n) ______ agreement binds an employee or another party to not disclose a company's trade secret. A ____________ agreement prevents an individual fro, competing against a former employer for a specified period of time.
non breach-of-trust, nonchallenge
voluntary truth, nonparticipate
binding confidentiality, noncompete
7. Trevor Parsons just took a job with Twitter. As part of his employment contract, Trevor signed an agreement that states that he will not disclose any of Twitter’s trade secrets. The agreement that Trevor signed is called a(n):
non breach-of-trust agreement
binding confidentiality agreement
8. Which form of business ownership is a particularly poor choice for an aggressive entrepreneurial firm?
subchapter S corporation
limited liability corporation
9. Which of the following statements is incorrect regarding sole proprietorships?
There is one owner
Liquidity of the investment is high
Sole proprietor is in full control
Business ends at owner's death or loss of interest in the business
Money must be raised by the sole proprietor
Partnerships are organized as either:
specific or general partnerships
narrow or broad partnerships
inward or outward partnerships
general or limited partnerships
partial or full partnerships
a _____ sets forth the rights and duties of the general partners and limited partners, along with the details of how the partnership will be managed and eventually dissolved:
restricted partnership agreement
business partnership agreement
limited partnership agreement
A corporation is formed by filing ______ with the Secretary of State's office in the state of incorporation.
certificate of intent to incorporate
article of business
a corporation permit
articles of incorporation
13. A disadvantage of corporations is that they are subject to ______, which means that a corporation is taxed on its net income and when the same income is distributed to shareholders in the form of dividends it is taxed again on the shareholders’ income tax returns.
14. The ______ is a form of business organization that is rapidly gaining popularity in the United States. The connect originated in Germany and was first introduced in the United States in the state of Wyoming.
Limited liability company
In what form of business ownership are owners called "members"?
limited liability company
subchapter C corporation
Financial management deals with two things --- managing a company's financed and:
supply chain management
17. Which of the following was not identified as one of the four main financial objectives of a firm?
Match the financial objective with the correct definition.
stability/ the overall health of the financial structure of the firm, particularly as it relates to its debt-to-equity ratio
liquidity/a company's ability to make a profit
profitability/how productively a firm utilizes its assets
efficiency/a company's ability to meet its short-term obligations
profitability/the overall health of the financial structure of the firm, particularly as it relates to its debt-to-equity ratio
_______ is a company's ability to meet its short-term financial obligations.
20. Peggy Owens owns a store that sells exercise equipment. Each January 1, she makes a very accurate account of all her merchandise and products waiting to be sold in her store. On January 1, Peggy is taking account of her store’s:
21. Southwest Airlines uses its assets very productively. Its turnaround time, or the time that its airplanes sit on the ground while they are being loaded and unloaded, is the lowest in the airline industry, In terms of the primary financial objectives of the fir, this attribute is a measure of
_____ depict relationships between items on a firm's financial statements.
23. Which financial statement records all of a firms revenues and expenses for a given period and shows whether the firm is making a profit or experiencing a loss?
owner's equity statement
statement of cash flows
On a firm's income statement, net sales consists of:
operating expenses minus cost of sales
total sales minus allowances for returned goods and discounts
cost of sales minus allowances for returned goods and discounts
cost of sales minus operating expenses
total sales minus operating expenses
Cash plus items that are readily convertible to cash such as accounts receivable, marketable securities, and inventories are classified as ______ on a firm's balance sheet
intermediate term assets
When evaluating a balance sheet, two primary questions are:
whether a firm has sufficient short-term assets to cover its short-term debts and whether it is profitable
whether a firm is profitable and whether a firm is financially sound
whether its costs of sales is going up and whether it is generating excess cash that could be used to pay down debt or pay dividends
whether a firm has sufficient short-term assets to cover its short-term debts and whether it is financially sound
whether a firm is profitable and whether it is generating excess cash that could be used to pay down debt or pay dividends
Which of the financial statements used by businesses to keep track of their financial affairs is most similar to a person's end-of-the month bank statement?
statement of ratio analysis
statement of owner's equity
The statement of cash flows is divided into three separate activities:
profitability activities, stability activities, investing activities
stability activities, earning activities, financing activities
operating activities, capital activities, liquidity activities
spending activities, earning activities, capital activities
operating activities, investing activities, financing activites
In the context of a firm's statement of cash flows, _____ include cash raised during the period by borrowing money or selling stock and/or cash used during the period by paying dividends, buying back outstanding stock or buying back outstanding bonds
In the context of a firm's statement of cash flows, _____ include the purchase, sale or investment in fixed assets, such as real estate, equipment and buildings
The ________ provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time.
pro forma balance sheet
pro forma statement of cash flows
pro forma income statement
pro forma expense statement
pro forma statement of owner's equity
A ________ is the group of founders, key employees, and advisors that move a new venture from an idea to a fully functioning firm.
new venture panel
new venture team
new project team
34. Jenny Templeton is preparing to launch a hoe security firm. The team of people that will launch Jenny’s firm are, as follows: Jenny (CEO), Brent (VP Finance), Carrie (VP Sales), a four person Board of Directors, a fiver person Board of Advisors, and Jenny’s primary investor who will assume an advisory role. The group of people that will launch Jenny’s firm is called its:
New venture team
Which of the following statements is untrue regarding founding teams?
The members of heterogenous teams are diverse in terms of their abilities and experiences
The members of homogenous teams are very similar in terms of their abilities and experiences
teams that have worked before together have an edge
Studies show that more than one individual starts 50 to 70 percent of all new firms
It is generally believed that new ventures started by an individual have an advantage over new ventures started by a team
Which of the following statements is incorrect regarding founding teams?
The members of heterogeneous teams are diverse in terms of their abilities and experiences
Teams that are working together for the first time have an advantage over teams that have worked together before
The psychological support that cofounders of a new business can offer one another is an important element of a firm's success
the members of a homogeneous team are very similar in terms of their abilities and experiences
Studies show that more than one individual starts 50 to 70 percent of all new teams.
The members of heterogeneous teams are:
diverse in terms of their abilities and experiences
diverse in terms of their abilities but very similar in terms of their experiences
similar in terms of their abilities and experiences
diverse in terms of their experiences, but very similar in terms of their abilities
sometimes diverse in terms of their abilities and experiences and sometimes similar along the same dimensions
Which of the following statements is not true regarding the attributes of the founder or founders of a firm?
Evidence suggests that important entrepreneurial skills are enhances through higher education
Founders with prior entrepreneurial experience are more likely to avoid costly mistakes
founders with experience in the same industry as their new ventures will typically have "blinders" on and are typically not as effective as founders new to the industry
Founders with broad social and professional networks have an advantage
new ventures that are started by a team rather than an individual have an advantage
A(n) _______is a chart that depicts the most important skills that are needed in a new venture and where the skill gaps exist
40. Jason Andersen just finished writing a business plan for a new type of office supply store. One thing Jason included in the “Management Team and Company Structure” section of his business plan is a chart that depicts the most important skills that are needed for his business and where the skills gaps exist. Jason included a(n) _____ in his business plan:
41. Kate Harrison is in the process of launching an educational services firm. She plans to incorporate the firm. Because the firm will be incorporated, Kate is legally require to have a :
board of investors
board of advisors
customer advisory board
Board of directors
panel of advisors and peers
A board of directors if typically made up of both:
junior and senior directors
inside and outside directors
experienced and inexperienced directors
novice and expert directors
paid and unpaid directors
43. James Williams is the Chief Operating Officer of a startup in the health food industry. He is also a member of his firm’s Board of Directors. In Board of Directors terminology, James is a(n):
44. Keith Barnes is a general partner in a venture capital firm that just funded South florida Software, a software firm in Coral Gables Florida. South Florida Software is incorporated, and Keith has taken a seat on the firm’s board of directors. In Board of Directors terminology, Keith is a(n):
A board of directors has three formal responsibilities
periodically update the firm's business plan, declare dividends and write the firm's marketing plan
appoint the officers of the firm, declare dividends and oversee the affairs of the corporation
write the firm's strategic plan, declare dividends, and conduct the annual meeting
appoint the officers of the company, conduct the annual meeting and submit the firm's annual report to the Securities and Exchange Commission
provide funding to the firm, write the firm's strategic plan and submit the firm's annual report to the Securities and Exchange Commission
A(n) _______________ is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis
47. William Woods recently launched a printing company. One thing William is thinking about creating is a panel of experts who can provide him ongoing direction and advice regarding the future of his business. William is thinking about creating a(n)
48. Which of the following is incorrect regarding the typical role of consultants in business startups?
give professional advice
international consulting firms like Accenture and Bearing Point are financially beyond the reach of most small firms
consultants fall into two categories: paid consultants and consultants who are made available for free
give expert advice
Help manage day-to-day activities of the firm
49. Kimberly Jones is the founder of a company in the medical equipment industry Kimberly’s firm is still in the feasibility analysis stage and doesn’t have a product that is ready to sell. The company is spending about $25,000 per month and expects to maintain that level of spending until it reaches profitability. The $25,000 per month is Kimberly’s:
The three reasons startups need funding are:
cash flow challenges, capital investments and lengthy product development cycles
business research, cash flow challenges, and costs associates with building a brand
bonuses for members of the new venture team, attorney fees, and lengthy product development cycles
attorney fees, capital investments, and marketing research
bonuses for members of the new venture team, marketing research and personnel costs
51. In startup firms, inventory must be purchases, employees must be trained and paid, and advertising must be paid for before cash is generated from sales. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?
Cash flow challenges
lengthy product development cycles
52. Jason Graham’s startup, which is in the electronics industry, was launched on January 1, 2009. However, prior to its formal launch, Jason spent many hours working on his business, particularly during the feasibility analysis stage. The time and effort that entrepreneurs put into their venture, that can’t easily be measured from a financial point of view, is referred to as:
Equity financing (or funding) means:
exchanging partial ownership in a firm, usually in the form of stock, for funding
getting a grant or outright gift
getting a loan
getting a lease
getting a loan guarantee
Which of the following is not a source of equity funding?
initial public offering
Once a venture capitalist makes an investment in a firm, subsequent investments are made in rounds and are referred to as:
56. An important part of obtaining venture capital funding is going through ______, which refers to the process of investigating the merits of a potential venture and verifying the key claims made by the business plan
57. In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture’s life to fund the development of a prototype and feasibility analysis is referred to as:
The main difference between SBIR and STTR programs is that the STTR program requires the participation of:
a venture capitalist
researchers working at universities or other research institutions
a certified public accountant
a government agency in conducting research
Which of the following statements is incorrect about grant programs?
Granting agencies are very visible and well-known, so normally its not hard to find one.
The federal government has grant programs beyond the SBIR and STTR programs
It's important to avoid grant-related scams
There are a limited number of organizations that offer new business grants
There are private foundations that grant money to both existing and startup firms
The first step in selecting a target market is to study the industry in which the firm intends to compete and determine the different potential target markets in that industry. This process is called:
Which of the following is the correct sequence of events in regard to the process of selecting a target market and position strategy?
creating a unique positioning strategy, selecting a target market , segmenting the market
segmenting the market, creating a unique positioning strategy, selecting a target market
segmenting the market, selecting a target market, creating a unique positioning strategy
selecting a target market, creating a unique positioning strategy, segmenting the market
creating a unique positioning strategy, segmenting the market, selecting a target market
A(n) ________________ is the set of attributes, positive or negative, that people associate with a company
Which of the following selections is incorrect regarding a firm's "positioning strategy"?
Which of the following is incorrect regarding a firm's "positioning" strategy?
Position is concerned with how the firm is situated relative to its competitors
A firm's decision about how to position itself relative to its competitors starts with a product or service that is tested and refined through feasibility analysis and marketing research
Position is concerned with how a firm is situated relative to competitors
Once a firm positions itself in a certain way, it must be able to follow through with a product or service that lives up to the image it has created
After selecting a positioning strategy, the firm's next step is to select a target market
Creating _______ means creating awareness and a sense of anticipation about a company and it offerings.
Which of the following statements is incorrect regarding the process of building a company's brand?
A firm's names, logo, web site design and even its letterhead are part of its brand
One of the keys to effective branding is to create a strong personality for the firm
Some companies monitor the integrity of their brands through brand management
Startups must build a brand from scratch, which starts with selecting the company's name.
Most experts recommend a heavy reliance on advertising in building a firm's brand
____________ is a term that denotes the set of assets and liabilities that are linked to a brand and enable it to raise a firm's valuation.
Trade name strength
A(n) ______ is an early user of a firm's product who is willing to give a testimonial regarding his or her experience with the product.
68. Before Kim Green opened her Jiffy print store, she processed several large print jobs for local merchants for free, to demonstrate the quality of her service and to solicit feedback. Two of the merchants wrote favourable reviews of Kim’s service, and agreed to let Kim post the reviews on her company’s web site. The companies that wrote the favourable reviews are referred to as:
________________ refers to the activities the firm takes to communicate the merits of its product to its target market
The Google program called ____________ allows advertisers to buy keywords on Google Home Page.
A(n) ________ is a route a product takes from the place it is made to the customer who is the end user
A firm's sales process:
is typically not put in place until a year or more after a startup launches
describes a firm's branding strategy
depicts the steps it goes through to identify prospects and close sales
describes it social media strategy
depicts the steps it goes through to identify its target market and positioning strategy