chapter 6

Question 1

Entrepreneurship

Answer 1

Strategic thinking and risk-taking behaviour
that result in new opportunities

Question 2

Classic entrepreneur

Answer 2

Pursues opportunities others view as
problems or threats

Question 3

Serial entrepreneur:

Answer 3

Starts and runs businesses and nonprofits
over and over again

Question 4

First-mover advantage

Answer 4

: First to exploit a niche or enter a new market

Question 5

Necessity-based entrepreneurship

Answer 5

Starting a business because
of few or no other employment or career options

Question 6

Social entrepreneurship

Answer 6

Unique form of ethical entrepreneurship that seeks novel ways to solve pressing social problems

Question 7

Franchise

Answer 7

One business owner sells to another the right to operate the same business in another location

Question 8

Business model

Answer 8

Plan for making a profit by generating revenues that are greater than costs

Question 9

Startup

Answer 9

New and temporary venture that is trying to establish a profitable business model

Question 10

Lean startups

Answer 10

Use open source software and free web services to contain costs while staying small and keeping operations simple

Question 11

Business incubator

Answer 11

Offers space, shared services and advice to get small businesses started

Question 12

Business Development Program

Answer 12

Offers guidance to entrepreneurs and small business owners on
how to set up and manage business operations

Question 13

Small Business Development Centres

Answer 13

Supported by government, for e.g. US, Canadian

Question 14

Business plan

Answer 14

• Describes the details needed to obtain start-up financing and operate a new business
• Banks want to see a well-developed business plan before lending money

Question 15

Sole Proprietorship:

Answer 15

An individual or married couple pursuing business for a profit. This does not involve incorporation

Question 16

Partnership

Answer 16

Two or more people agree to contribute resources to start and operate a business together

Question 17

General Partnership

Answer 17

The owners share management responsibilities

Question 18

Limited Partnership

Answer 18

General partner manages the business. Limited
partners share profit but losses are limited to the amount of their
investment

Question 19

Limited Liability Partnership:

Answer 19

Limits the liability of one partner for the
negligence of another

Question 20

Corporation

Answer 20

A legal entity that exists separately from its owners

Question 21

Benefit Corporation

Answer 21

• Corporate form for businesses whose stated goals are to combine
  making a profit with benefiting society and the environment
• This ownership type typically adopts the goals of social
  entrepreneurship and social enterprises

Question 22

Limited Liability Corporation (LLC)

Answer 22

A combination of sole proprietorship,
partnership, and corporation

Question 23

Debt Financing

Answer 23

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

Question 24

Equity Financing

Answer 24

Involves exchanging ownership shares for outside
investment monies

Question 25

Venture Capitalists

Answer 25

Involves making large investments in new ventures
in return for an equity stake in the business - normally will become part of the management

Question 26

Angel Investor

Answer 26

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

Question 27

Crowdfunding

Answer 27

Entrepreneurs starting new ventures go online to get
startup financing from crowds of investors