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Winter 2019 > Entrepreneurship Exam II > Flashcards

Entrepreneurship Exam II Flashcards

1
Q

What are the 7 roles in a team?

A
  1. Founder(s)
  2. Board of directors
  3. Board of advisors
  4. Key employees
  5. Management team
  6. Lenders and investors
  7. Other professionals
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2
Q

3 formal responsibilities of directors

A
  1. Appoint the officers of the firm
  2. Declare dividends
  3. Oversee the affairs of the corporation
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3
Q

Who takes the responsibility in strategy for setting organizational direction during strategy formulation and fulfilling monitoring and control functions during strategy implementation?

A

Directors

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4
Q

Which role involves having a panel of experts who are asked by a firm’s managers to provide counsel on an ongoing basis?

A

Advisors

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5
Q

Difference between advisors and directos

A

Advisory possesses no legal responsibility for the firm and gives nonbinding advice while directors do

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6
Q

When can an advisory board be established?

A

For general or specific purposes

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7
Q

Between directors and advisors, which is a necessary component?

A

Directors

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8
Q

Who have a vested interest in the companies they finance, often causing them to become very involved in helping the firms they fund.

A

Lenders and investors

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9
Q

Examples of other professionals on a team

A

attorneys, accountants, and business consultants

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10
Q

2 types of leaders

A

directive and empowering

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11
Q

type of leader that guides action

A

directive

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12
Q

type of leader that inspires team

A

empowering

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13
Q

What type of team achieves better performance when led by a directive leader?

A

Heterogenous teams

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14
Q

What type of team achieves better performance when led by an empowering leader?

A

Homogenous

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15
Q

What type of member additions typically lead to reaching IPO

A

diversified members

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16
Q

The company that promotes a happiness culture in their workspace is

A

Zappos

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17
Q

Zappos offices get rid of titles, creating a…

A

holocracy (decentralization of management)

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18
Q

Zappos looks for what type of fit?

A

Cultural fit instead of skills

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19
Q

What type of conflict positively associates with profit sales and growth in new ventures?

A

Cognitive conflict

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20
Q

What type of conflict inversely relates to profit, sales and growth in new ventures?

A

Affective conflict

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21
Q

9 components to the business model canvas?

A
  1. Key resources
  2. Cost structure
  3. Key partners
  4. Key activities
  5. Value proposition
  6. Customer relationships
  7. Customer segments
  8. Revenue streams
  9. Channels
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22
Q

What part of the business model asks: For whom are we creating value for?

A

Customer segments

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23
Q

What part of the business model asks: What value do we deliver to the customer?

A

Value proposition

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24
Q

What part of the business model asks: how are we going to reach our customer segments?

A

Channels

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25
Q

What part of the business model asks: What type of relationship does each of our customer segments expect us to establish and maintain with them?

A

Customer relationship

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26
Q

What part of the business model asks: For what value are our customers really willing to pay?

A

Revenue streams

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27
Q

What part of the business model asks: what key resources do our value propositions require?

A

Key resources

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28
Q

What part of the business model asks: what key activities do our value propositions require?

A

Key activities

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29
Q

What part of the business model asks: who are our key suppliers?

A

Key partners

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30
Q

What part of the business model asks: What are the most important costs inherent in our business model?

A

Cost structure

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31
Q

Why do companies want to hire entrepreneurial people?

A

They are more self motivated and want to learn - they consider work as training

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32
Q

What did sequins international do to have better ergonomics?

A

Eliminated carpal tunnel syndrome by automatic spooling and adjustable chairs

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33
Q

the science of adapting work and the work environment to complement employees strengths and to suit customers needs in design

A

ergonomics

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34
Q

Team commitment is associated with…

A

NVT effectiveness

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35
Q

What two main criteria do millenials crave for their workplace?

A
  1. Autonomy

2. Meaning and fulfilment

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36
Q

the process of influencing and inspiring others to work to achieve a common goal and then giving them the power and freedom to achieve it

A

leadership

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37
Q

difference between roles of management and leadership

A

Leadership gets a small business going, management keeps it going

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38
Q

3 advantages to sole proprietorship

A
  1. Easy and inexpensive registration
  2. Direct control of decision making
  3. All profits go to you directly
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39
Q

3 disadvantages of sole proprietorship

A
  1. Unlimited liability
  2. Income tax at your personal rate
  3. Lack of continuity of business if you are unavailable
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40
Q

Type of legal form of business organization that is for a non-incorporated business

A

partnership

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41
Q

3 types of partnership

A
  1. General
  2. Limited
  3. Limited Liability
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42
Q

Type of partnership where each partner is jointly liable for the debts of the partnership

A

general

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43
Q

type of partnership where a person an contribute to the business without being involved in it’s operations

A

limites

44
Q

type of partnership that is usually only available to a group of professionals such as lawyers, accountants or doctors

A

limited liability

45
Q

3 pros of partnership

A
  1. Startup costs are shared equally
  2. Relatively inexpensive
  3. Tax advantage
46
Q

3 disadvantages of partnerships

A
  1. There is no legal difference between you and your business
  2. Unlimited liability
  3. Can be difficult to find a suitable partner
47
Q

When you incorporate your business, it is considered to be….

A

a legal entity that is separate from its shareholders

48
Q

4 pros of incorporation

A
  1. Limited liability
  2. Ownership is transferable
  3. Separate legal entity
  4. Continuous existence
49
Q

3 disadvantages for a coporation

A
  1. Closely regulated
  2. More expensive to set up
    3, Possible conflict between shareholders and directors
50
Q

Why is equal division of equity a red flag to investors?

A

They fear that the team didn’t take the time to ask awkward but important questions

51
Q

What is a system of distribution in which semi-independent business owners pay fees and royalties to a parent company in return for the right to become identified with it’s trade mark, sell its products and services, and use its business format and system?

A

franchise

52
Q

3 advantages of buying a franchise

A
  1. proven product/service
  2. Training and technical expertise
  3. Established marketing network
53
Q

3 disadvantages of a franchise

A
  1. Cost
  2. Restrictions on creativity
  3. Contract terms
54
Q

What alternative to VC funding provides an office space, business coaching and mentoring to help startups worry less about practical business technicalities

A

incubators

55
Q

What is the purpose of an income statement?

A

To see if a company is turning out a profit or a loss over a specific period of time

56
Q

What is the purpose of a balance sheet?

A

gives you a snapshot of a company’s financial situation at a particular point in time

57
Q

What is the cash flow statement for?

A

tells you how much cash the company possesses and its sources and uses of such cash

58
Q

What is the purpose of an exit strategy for a business?

A

to limit losses

59
Q

form of intellectual property law that protects original works of authorship including literary, dramatic, musical and artisti works

A

copyright

60
Q

grant of a property right to an inventor to exlude others from making, using or sellling his or her invention

A

patent

61
Q

a name, symbol, or secial mark used to identify a business or brand of product

A

trademark

62
Q

term for what is used to conceal the details of their products from the public

A

trade secrets

63
Q

4 Pros of private funding

A
  1. Guidance
  2. Greater investment
  3. Less risk
  4. Connections
64
Q

4 cons of private investment

A
  1. Less control
  2. Greater pressure
  3. Minority ownership status
  4. Laborious process
65
Q

3 types of crowdfunding

A
  1. Rewards-based
  2. Equity based
  3. Debt-based
66
Q

4 pros of crowdfunding

A
  1. Product validation
  2. Publicity
  3. User-friendly
  4. Zero equity requirements
67
Q

3 cons of crowdfunding

A
  1. Difficult for b2b
  2. marketing challenges
  3. funding rules
68
Q

6 alternatives to VC funding

A
  1. Incubators
  2. Microloans
  3. Peer to peer lending
  4. CVC funding
  5. Become part of a bigger thing
  6. Purchase order financing
69
Q

time period of income statement

A

over a certain time period such as a quarter, month, or fiscal year

70
Q

time period of balance sheet

A

specific date or time

71
Q

The _____________ describes how the assets and liabilities were used in the stated accounting period

A

income statement

72
Q

what are the components of determining the income statement

A

revnues and expenses

73
Q

equation for income statement

A

Revenues - Expenses = profit/loss

74
Q

When is a balance sheet typically prepared?

A

at the end of a month, quarter, or fiscal year

75
Q

underlying equation for balance sheet

A

Assets = Liabilties + owners equity

76
Q

What are liabilities?

A

existing debts a company owers to its creditors and lendors

77
Q

equation for owners equity

A

Assets - liabilities

78
Q

What does owner’s equity represent?

A

the part of the company owned by its owners or shareholders

79
Q

if a company has $4 million in assets and $3 million in liabilities, it has $ ____ in owners’ equity

A

$1 million

80
Q

2 types of assets

A

current and fixed

81
Q

What side of the balance sheet are assets listed?

A

left

82
Q

Type of assets that the company plans to convert to cash, sell, or use during the coming year

A

current assets

83
Q

assets that the company does not plan to turn into cash within on year

A

fixed

84
Q

examples of fixed assets

A

property, plants, machinery

85
Q

examples of current assets

A

cash, accounts receivable, inventory on hand

86
Q

What side of the balance sheet lists liabilities and owner’s equity?

A

right

87
Q

2 types of liabilities

A
  1. Current

2. Long-term

88
Q

type of liability money that the company is expected to pay within one year

A

current

89
Q

type of liability that the company needed to pay back in one or more years

A

long term

90
Q

examples of current liabilities

A

short term borrowings

91
Q

examples of long term liabilities

A

mortgages

92
Q

two types of owners equity

A
  1. Contributed capital

2. Retained earnings

93
Q

Capital invested by a company’s owners or shareholders

A

contributed capital

94
Q

earnings reinvested in the business after all dividends were paid

A

retained earnings

95
Q

The cash flow statement is derived from…

A

the income and balance sheets

96
Q

3 sections of the cash flow statement

A
  1. Operating
  2. Investing
  3. Financing
97
Q

Type of cash flow that includes cash generated by and required for the daily operations of a business

A

operating cash flow

98
Q

type of cash flow that includes cash used for investing in long term assets such as property inflows and outflows

A

investing

99
Q

examples of investing cash flow

A

inflow: sale of property
outflow: buying of property

100
Q

type of cash flow that includes cash paid or recieved from external sources such as lenders, investors and shareholders

A

financing

101
Q

equation for net cash flow

A

net cash flow = net operating + net investing + net financing

102
Q

Arikan’s 5 factors to choosing how a firm should be sold

A
  1. Bargaining power of the parties
  2. Resources value to each bidder
  3. Market thickness for demand and supply side
  4. Risk taking propensity of the parties
  5. Existence of search costs
103
Q

When is the only time that Arikan suggesting that there is an increased likelihood to choose M&A over IPO?

A

Increased bargaining power

104
Q

2 components of IPO

A

auction, bidding

105
Q

2 components of M7A

A

negotiation, bargaining

Winter 2019 (6 decks)

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