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MGT 4670-Entrepreneurship > Final Exam > Flashcards

Final Exam Flashcards

1
Q

an enterprise subject to taxes on its reported profits; tax on corporate profits as well as any corporate distribution to owners

A

regular taxable corporation

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2
Q

firms where all profits flow to the owners free of any prior taxation

A

flow-through entities

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3
Q

a legal entity separate from its owners; a body of owners granted a charter to act as a separate entity distinct from its owners

A

corporation

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4
Q

4 main types of flow through entities

A

sole proprietorship, partnership, s corporation, and LLC

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5
Q

a firm owned by only one person and operated for his or her profit

A

sole proprietorship

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6
Q

business association of two or more people or firms who agree to cooperate with one another to achieve mutually compatible goals that would be difficult for each to accomplish alone

A

partnership (general or limited)

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7
Q

a firm with fewer than 50 employees operating as a sole proprietorship, a partnership, or a corporation owned by a few people

A

small business

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8
Q

seeks to exploit a limited opportunity or market to provide the entrepreneurs with independence and a slow-growth build-up of the business

A

niche business

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9
Q

a business corporation that aims to build an important new business and requires a significant initial investment to startup

A

high-growth business

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10
Q

a business based upon a radical innovation that seeks to commercialize it to build a special kind of high growth business

A

radical innovation

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11
Q

a corporation or a member association initiated to serve a social or charitable purpose

A

nonprofit organization

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12
Q

a new venture started by an existing corporation for the purpose of initiating and building an important new business unit or organization, solely owned subsidiary, or . spinoff as a new public company

A

corporate new venture (CNV)

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13
Q

a new venture that i snot owned or controlled by an established corporation

A

independent venture

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14
Q

a person or team that acts to form a new venture in response to an opportunity to deliver social benefits while satisfying environmental and economic values

A

social entrepreneur

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15
Q

the entrepreneurial process within the confines of an established corporation

A

intrapreneurship

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16
Q

the act of introducing products that compete with a firm’s already existing product line

A

cannibalization

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17
Q

an organization that is first established within an existing company and then sent off on its own

A

spin-off unit

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18
Q

an s corporation is taxed as

A

a flow through entity

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19
Q

a corporate new venture usually has _____ revenue growth

A

above average

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20
Q

the point of every non profit is to produce

A

social wealth

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21
Q

intrapreneurs have access to what

A

a team of entrepreneurial coworkers
the resources of an existing corporation
opportunities within the company

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22
Q

common fears that act as barriers for entry for corporate entrepreneurs

A

fewer promotion opportunities within the existing corporation; failure of the corporate new venture; loss of status

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23
Q

three things to establish conditions for corporate new ventures

A

increase the sources for innovation; establish a process for collecting and evaluation ideas; do not let traditional executives control the budget

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24
Q

the valuable intangible property owned by persons or companies

A

intellectual property

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25
Q

an intellectual asset protected by confidentiality, non disclosure and assignment of inventions agreements, as well as physical barriers such as safes and limited access

A

trade secret

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26
Q

a grant by the US government to an inventor giving exclusive rights to an invention or process for 20 years

A

patent

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27
Q

rights of exclusive use issued for the protection of new, useful, nonobvious, and adequately specified processes, machines, and manufacturing processes for a period of 20 years

A

utility patent

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28
Q

grants of exclusive right of use for new, original, ornamental, and non obvious designs for articles of manufacture for a period of 14 years

A

design patent

ex. apple rounded edges of rectangle screen of iPad

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29
Q

a grant of exclusive right of use for a term of 20 years for certain new varieties of plants that have been asexually reproduced

A

plant patent

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30
Q

a type of utility patent that involves the classification of a process

A

business method patent

Amazon one click order process

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31
Q

patent pending

A

provisional patent application (must file for the regular one within 12 months)

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32
Q

an distinctive word, name, symbol, slogan, shape, sound, or logo a firm uses to designate its product

A

trademark (indefinite length)

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33
Q

an exclusive right granted by the federal government to the owner to publish and sell literary, musical, and other artistic materials

A

copyright (life of the creator plus 70 years)

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34
Q

occurs when a firm (the licensor) grants the right to produce its product, use its production processes, or use its brand name or trademark to another firm (the licensee); licensor collects a royalty fee

A

licensing

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35
Q

a grant to another firm to make use of the rights of the licensor’s intellectual property

A

license

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36
Q

how can a trade secret be taken/used?

A

reverse engineering

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37
Q

a license is defined in a

A

contract

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38
Q

when one firm purchases another, the acquired company gives up its independence and the surviving firm assumes all assets and liabilities

A

acquisition

39
Q

three steps for acquiring a company

A
  1. target identification and screening
  2. bidding strategy
  3. integration or transition to the acquirer
40
Q

the increased effectiveness and achievement produced as a result of the combined action of two or more firms

A

synergy

41
Q

3 valuation methods

A

book value, price-to-sales ratio, price-to-earnings ratio

42
Q

the net worth (equity) of the firm, calculated by total assets minus intangible assets (patents, goodwill), and liabilities

A

book value

43
Q

the combining of two companies (tend to involve much higher degree of cooperation and integration)

A

merger

44
Q

an industry characterized by just a few seller firms

A

oligopoly

45
Q

a merger between two firms that make and sell similar products in a similar market

A

horizontal merger

46
Q

the merger of two firms at different places on the value chain

A

vertical merger

47
Q

5 different types of mergers and acquisitions

A 
overcapacity reduction
geographic extension (rollup)
product or market extension
technology acquisition
industry convergence
48
Q

4 roles of the integration manager

A
  1. inject speed into the process
  2. create a new structure
  3. make social connections
  4. build success
49
Q

common motivation for merger and acquisitions

A

to enter new markets

50
Q

the integration of markets, nation states, and technologies enabling people and companies to offer and sell their products in any country in the world

A

globalization

51
Q

a growth strategy focusing all efforts locally since that is the venture’s pathway to a competitive advantage

A

local or regional strategy

52
Q

a growth strategy that calls for a presence in more than one nation as resources permit (separate product and marketing strategy)

A

multidomestic strategy

53
Q

a growth strategy resting on a flow of product offerings created in any one of the countries of operation and transferred between countries

A

transnational strategy

54
Q

a growth strategy that aims to create value by transferring products and capabilities from the home market to other nations using export or licensing arrangements

A

international strategy

55
Q

a growth strategy that emphasizes worldwide creation of new products, sales, and marketing

A

global strategy

56
Q

the four globalization strategies

A

multidomestic, transnational, international, and global

57
Q

5 forms of entry into international markets

A

exporting, licensing, franchising, joint venture, and wholly owned subsidiary

58
Q

3 components of cultural intelligence

A

cognitive, physical, and emotional

59
Q

metanational company

A

a company that possesses 3 core capabilities

  1. being the first to identify and capture new knowledge emerging all over the world
  2. mobilizing this globally scattered knowledge to out-innovate competitors
  3. turning this innovation into value by producing, marketing, and delivering efficiently on a global scale
60
Q

the difference between a merger and acquisition is the degree of

A

control

61
Q

the amount of funds available to support a firm’s normal operations such as unexpected or out-of-the-ordinary, one-time-only expenses; current assets minus current liabilities

A

working capital

62
Q

5 factors that lead to different perceptions of investors and entrepreneurs

A
  1. uncertainty of projected outcomes 2. asymmetrical information 3. assigning a value to intangible intellectual property 4. dynamics of the industry and the financial marketplace 5. entrepreneur’s wealth is concentrated in venture while investors have diversified portfolios
63
Q

investors make capital investments in opportunities for

A

future cash returns

64
Q

the right to purchase an asset at some future date and at a predetermined price

A

option

65
Q

the right to invest in (or purchase) a real asset (such as the start up firm or shares) at a future date

A

real option

66
Q

the present value of the future cash flow of a venture discounted at an appropriate rate

A

net present value NPV

67
Q

the first funds used to launch a new firm

A

seed capital

68
Q

four stages of growth

A

founding stage, seed stage, growth stage, harvest stage

69
Q

the investment by a person in ownership through purchase of the stock of the firm (stockholders have a claim on assets and earnings and it represents ownership)

A

equity capital

70
Q

money that a business has borrowed and must repay in a specified time with interest (no ownership)

A

debt capital

71
Q

wealthy individuals, usually experience entrepreneurs, who invest in business startups in exchange for equity in the new venture

A

angels

72
Q

professional managers of investment funds

A

venture capitalists

73
Q

3 sources of equity capital

A

angels (individuals), VC firms, and corporations

74
Q

launching a startup with modest funds from the entrepreneurial team, friends, and family

A

bootstrap financing

75
Q

the joining together of a collection of individuals-the “crowd”- each of whom contributes a small amount to help fund a business

A

crowdfunding

76
Q

a type of bond that the investor can convert to stock in the new venture or cash of equal value at an agreed upon price

A

convertible note

77
Q

a type of financing that is invested in new and emerging ventures . by a professional investment company called a venture capital firm

A

venture capital

78
Q

four investment stages

A
  1. seed or startup stage 2. development stage (series A) 3. growth stage (series B or C) 4. competitive or maturity stage (IPO)
79
Q

the success of crowdfunding depends on

A

the entrepreneur’s social network and the quality of product

80
Q

an initiative by a corporation to invest in either young firms outside the corporation or units formerly part of the corporation

A

corporate venture capital

81
Q

the methodology by which an investor assigns monetary value to a new venture

A

valuation process

82
Q

the rate at which future earnings or cash flows is discounted because of the time value of money

A

discount rate

83
Q

uses the projected sales, profit, and cash flow in a target year (N) and the projected earning growth rate (g) for 5 years after year N to calculate the value of the firm

A

new venture valuation rule

84
Q

the ration of the price of a stock to the company’s earnings

A

PE ratio

85
Q

the valuation accorded an enterprise before investment by VCs and other investors

A

pre-money value (PREMV)

86
Q

the valuation accorded an enterprise after investment by VCs and other investors

A

post-money value (POSMV)

87
Q

cash in minus cash out on a monthly basis

A

burn rate

88
Q

3 reasons to issue an IPO

A

raise new capital, liquidity, image or brand

89
Q

gathering and verifying facts and data provided in a business plan before making a commitment to the terms of an investment deal

A

due diligence

90
Q

a decision-making process among interdependent parties who do not share identical preferences

A

negotiation

91
Q

a summary of the principal conditions for a proposed investment by a VC firm in a company

A

term sheet

92
Q

a long term option to acquire additional common shares, usually at a nominal price

A

warrant

93
Q

stock with preferences or claims on dividends and assets before common stock owners

A

preferred stock

94
Q

10/20/30 rule of pitches

A

10 slides, 20 minutes, minimum of 30 pt font text

MGT 4670-Entrepreneurship (2 decks)

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