chapter 18- entrepreneurship

Question 1

limited liability corporation (LLC)

Answer 1

a type of business that combines the advantages of the sole proprietorship, partnership and corporation

Question 2

entrepreneur

Answer 2

an individual who is willing to pursue opportunities in situations that others view as problems or threats

Question 3

family business feud

Answer 3

a type of family conflict that can lead to small business failure

Question 4

entrepreneurship

Answer 4

risk-taking behavior in pursuit of business success

Question 5

social entrepreneur

Answer 5

a person who takes risks to find new ways to solve pressing social problems

Question 6

venture capitalist

Answer 6

people who make large investments in new ventures in return for an equity stake in the business

Question 7

equity financing

Answer 7

a financing option that gives ownership shares to outsiders in return for their financial investments

Question 8

angel investor

Answer 8

a wealthy individual willing to invest in return for equity in a new venture

Question 9

business incubator

Answer 9

a facility that offers services to help new businesses get established

Question 10

family businesses

Answer 10

companies that are owned and financially controlled by family members

Question 11

corporation

Answer 11

a legal entity that exists separately from its owners

Question 12

limited partnership

Answer 12

a type of business in which partnership owners share profits but responsibility for losses is limited to original investments

Question 13

first-mover advantage

Answer 13

a situation that arises from being first to exploit a niche or enter a market

Question 14

initial public offering (IPO)

Answer 14

an initial selling of shares of stock to the public at large

Question 15

necessity-based entrepreneurship

Answer 15

a situation that occurs when people start new ventures because they have few or no other employment options

Question 16

succession plan

Answer 16

an outline of how the leadership transition and related financial matters will be handled

Question 17

partnership

Answer 17

a business formed when two or more people agree to contribute resources to start and operate a business together

Question 18

business plan

Answer 18

an outline that describes the direction for a new business and the financing needed to operate it

Question 19

small business

Answer 19

an organization that has fewer than 500 employees, is independently owned and operated, and does not dominate its industry

Question 20

general partnership

Answer 20

a type of business in which owners share management and responsibility for debts and losses

Question 21

small business development centers

Answer 21

organizations that offer guidance to entrepreneurs and small business owners on how to set up and manage business operations

Question 22

sole proprietorship

Answer 22

a business run by individual pursuing business for a profit

Question 23

succession problem

Answer 23

the issue of who will run the business when the current head leaves

Question 24

intrapreneurs

Answer 24

individuals who display entrepreneurial behavior as employees of larger firms

Question 25

debt financing

Answer 25

borrowing money from another person, a bank, or a financial institution