Entrepreneurship Exam II Flashcards
1
Q
What are the 7 roles in a team?
A
- Founder(s)
- Board of directors
- Board of advisors
- Key employees
- Management team
- Lenders and investors
- Other professionals
2
Q
3 formal responsibilities of directors
A
- Appoint the officers of the firm
- Declare dividends
- Oversee the affairs of the corporation
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
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
5
Q
Difference between advisors and directos
A
Advisory possesses no legal responsibility for the firm and gives nonbinding advice while directors do
6
Q
When can an advisory board be established?
A
For general or specific purposes
7
Q
Between directors and advisors, which is a necessary component?
A
Directors
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
9
Q
Examples of other professionals on a team
A
attorneys, accountants, and business consultants
10
Q
2 types of leaders
A
directive and empowering
11
Q
type of leader that guides action
A
directive
12
Q
type of leader that inspires team
A
empowering
13
Q
What type of team achieves better performance when led by a directive leader?
A
Heterogenous teams
14
Q
What type of team achieves better performance when led by an empowering leader?
A
Homogenous
15
Q
What type of member additions typically lead to reaching IPO
A
diversified members
16
Q
The company that promotes a happiness culture in their workspace is
A
Zappos
17
Q
Zappos offices get rid of titles, creating a…
A
holocracy (decentralization of management)
18
Q
Zappos looks for what type of fit?
A
Cultural fit instead of skills
19
Q
What type of conflict positively associates with profit sales and growth in new ventures?
A
Cognitive conflict
20
Q
What type of conflict inversely relates to profit, sales and growth in new ventures?
A
Affective conflict
21
Q
9 components to the business model canvas?
A
- Key resources
- Cost structure
- Key partners
- Key activities
- Value proposition
- Customer relationships
- Customer segments
- Revenue streams
- Channels
22
Q
What part of the business model asks: For whom are we creating value for?
A
Customer segments
23
Q
What part of the business model asks: What value do we deliver to the customer?
A
Value proposition
24
Q
What part of the business model asks: how are we going to reach our customer segments?
A
Channels
25
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?
Customer relationship
26
What part of the business model asks: For what value are our customers really willing to pay?
Revenue streams
27
What part of the business model asks: what key resources do our value propositions require?
Key resources
28
What part of the business model asks: what key activities do our value propositions require?
Key activities
29
What part of the business model asks: who are our key suppliers?
Key partners
30
What part of the business model asks: What are the most important costs inherent in our business model?
Cost structure
31
Why do companies want to hire entrepreneurial people?
They are more self motivated and want to learn - they consider work as training
32
What did sequins international do to have better ergonomics?
Eliminated carpal tunnel syndrome by automatic spooling and adjustable chairs
33
the science of adapting work and the work environment to complement employees strengths and to suit customers needs in design
ergonomics
34
Team commitment is associated with...
NVT effectiveness
35
What two main criteria do millenials crave for their workplace?
1. Autonomy
| 2. Meaning and fulfilment
36
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
leadership
37
difference between roles of management and leadership
Leadership gets a small business going, management keeps it going
38
3 advantages to sole proprietorship
1. Easy and inexpensive registration
2. Direct control of decision making
3. All profits go to you directly
39
3 disadvantages of sole proprietorship
1. Unlimited liability
2. Income tax at your personal rate
3. Lack of continuity of business if you are unavailable
40
Type of legal form of business organization that is for a non-incorporated business
partnership
41
3 types of partnership
1. General
2. Limited
3. Limited Liability
42
Type of partnership where each partner is jointly liable for the debts of the partnership
general
43
type of partnership where a person an contribute to the business without being involved in it's operations
limites
44
type of partnership that is usually only available to a group of professionals such as lawyers, accountants or doctors
limited liability
45
3 pros of partnership
1. Startup costs are shared equally
2. Relatively inexpensive
3. Tax advantage
46
3 disadvantages of partnerships
1. There is no legal difference between you and your business
2. Unlimited liability
3. Can be difficult to find a suitable partner
47
When you incorporate your business, it is considered to be....
a legal entity that is separate from its shareholders
48
4 pros of incorporation
1. Limited liability
2. Ownership is transferable
3. Separate legal entity
4. Continuous existence
49
3 disadvantages for a coporation
1. Closely regulated
2. More expensive to set up
3, Possible conflict between shareholders and directors
50
Why is equal division of equity a red flag to investors?
They fear that the team didn't take the time to ask awkward but important questions
51
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?
franchise
52
3 advantages of buying a franchise
1. proven product/service
2. Training and technical expertise
3. Established marketing network
53
3 disadvantages of a franchise
1. Cost
2. Restrictions on creativity
3. Contract terms
54
What alternative to VC funding provides an office space, business coaching and mentoring to help startups worry less about practical business technicalities
incubators
55
What is the purpose of an income statement?
To see if a company is turning out a profit or a loss over a specific period of time
56
What is the purpose of a balance sheet?
gives you a snapshot of a company's financial situation at a particular point in time
57
What is the cash flow statement for?
tells you how much cash the company possesses and its sources and uses of such cash
58
What is the purpose of an exit strategy for a business?
to limit losses
59
form of intellectual property law that protects original works of authorship including literary, dramatic, musical and artisti works
copyright
60
grant of a property right to an inventor to exlude others from making, using or sellling his or her invention
patent
61
a name, symbol, or secial mark used to identify a business or brand of product
trademark
62
term for what is used to conceal the details of their products from the public
trade secrets
63
4 Pros of private funding
1. Guidance
2. Greater investment
3. Less risk
4. Connections
64
4 cons of private investment
1. Less control
2. Greater pressure
3. Minority ownership status
4. Laborious process
65
3 types of crowdfunding
1. Rewards-based
2. Equity based
3. Debt-based
66
4 pros of crowdfunding
1. Product validation
2. Publicity
3. User-friendly
4. Zero equity requirements
67
3 cons of crowdfunding
1. Difficult for b2b
2. marketing challenges
3. funding rules
68
6 alternatives to VC funding
1. Incubators
2. Microloans
3. Peer to peer lending
4. CVC funding
5. Become part of a bigger thing
6. Purchase order financing
69
time period of income statement
over a certain time period such as a quarter, month, or fiscal year
70
time period of balance sheet
specific date or time
71
The _____________ describes how the assets and liabilities were used in the stated accounting period
income statement
72
what are the components of determining the income statement
revnues and expenses
73
equation for income statement
Revenues - Expenses = profit/loss
74
When is a balance sheet typically prepared?
at the end of a month, quarter, or fiscal year
75
underlying equation for balance sheet
Assets = Liabilties + owners equity
76
What are liabilities?
existing debts a company owers to its creditors and lendors
77
equation for owners equity
Assets - liabilities
78
What does owner's equity represent?
the part of the company owned by its owners or shareholders
79
if a company has $4 million in assets and $3 million in liabilities, it has $ ____ in owners’ equity
$1 million
80
2 types of assets
current and fixed
81
What side of the balance sheet are assets listed?
left
82
Type of assets that the company plans to convert to cash, sell, or use during the coming year
current assets
83
assets that the company does not plan to turn into cash within on year
fixed
84
examples of fixed assets
property, plants, machinery
85
examples of current assets
cash, accounts receivable, inventory on hand
86
What side of the balance sheet lists liabilities and owner's equity?
right
87
2 types of liabilities
1. Current
| 2. Long-term
88
type of liability money that the company is expected to pay within one year
current
89
type of liability that the company needed to pay back in one or more years
long term
90
examples of current liabilities
short term borrowings
91
examples of long term liabilities
mortgages
92
two types of owners equity
1. Contributed capital
| 2. Retained earnings
93
Capital invested by a company's owners or shareholders
contributed capital
94
earnings reinvested in the business after all dividends were paid
retained earnings
95
The cash flow statement is derived from...
the income and balance sheets
96
3 sections of the cash flow statement
1. Operating
2. Investing
3. Financing
97
Type of cash flow that includes cash generated by and required for the daily operations of a business
operating cash flow
98
type of cash flow that includes cash used for investing in long term assets such as property inflows and outflows
investing
99
examples of investing cash flow
inflow: sale of property
outflow: buying of property
100
type of cash flow that includes cash paid or recieved from external sources such as lenders, investors and shareholders
financing
101
equation for net cash flow
net cash flow = net operating + net investing + net financing
102
Arikan's 5 factors to choosing how a firm should be sold
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
When is the only time that Arikan suggesting that there is an increased likelihood to choose M&A over IPO?
Increased bargaining power
104
2 components of IPO
auction, bidding
105
2 components of M7A
negotiation, bargaining
