Chapter 5 Entrepreneurship: Starting and Managing Your Own Business

Question 1

Questions

Answer 1

Answers

Question 2

A business with under 500 employees that is independently managed, is owned by an individual or a small group of investors, is based locally, and is not a dominant company in its industry is considered a(n) __________________________.

Answer 2

small business

Question 3

_____________ are people with vision, drive, and creativity who are willing to take the risk of starting and managing a business to make a profit, or greatly changing the scope and direction of an existing firm.

Answer 3

entrepreneurs

Question 4

___________ are entrepreneurs who apply their creativity, vision, and risk-taking within a large corporation, rather than starting a company of their own.

Answer 4

intrapreneurs

Question 5

A formal written statement that describes in detail the idea for a new business and how it will be carried out is called a(n) _____________. It includes a general description of the company, the qualifications of the owner(s), a description of the product or service, an analysis of the market, and a financial plan.

Answer 5

business plan

Question 6

A form of business financing consisting of borrowed funds that must be repaid with interest over a stated time period is called ____________.

Answer 6

debt

Question 7

A form of business financing consisting of funds raised through the sale of stock (i.e., ownership) in a business is called _________.

Answer 7

equity

Question 8

________________ are Individual investors or groups of experienced investors who provide financing for start-up businesses by investing their own funds.

Answer 8

angel investors

Question 9

___________ is financing obtained from venture capitalists, investment firms that specialize in financing small, high-growth companies. They receive an ownership interest and a voice in management in return for their money.

Answer 9

venture capital

Question 10

The __________ is a government agency that speaks on behalf of small business; specifically it helps people start and manage small businesses, advises them in the areas of finance and management, and helps them win federal contracts.

Answer 10

Small Business Administration (SBA)

Question 11

A privately owned and managed investment company that is licensed by the Small Business Administration and provides long-term financing for small businesses is called a(n) __________.

Answer 11

Small Business Investment Company (SBIC)