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ENTR 2030 > Quiz 3 > Flashcards

Quiz 3 Flashcards

1
Q

What is a revenue model?

A

A roadmap for how a company creates, delivers, and captures value

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2
Q

What is the unit sales revenue model?

A

Generating revenue by the number of items sold

T shirts, razers…
The more units sold = the higher the revenue

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3
Q

What is the advertising revenue model?

A

Generating income through advertising products and services

A company provides a platform for advertisers to promote their products or services on. The revenue is generated from the fees charged to advertisors

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4
Q

What is the data revenue model?

A

generating income by leveraging and monetizing data

They must sell the data to other companies, facebook and google are NOT examples.

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5
Q

What is a subscription revenue model?

A

generating revenue by charging customers to gain continuous access to a product or service.

Set fee, does not change based on usage.

Netflix, amazon prime

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5
Q

What is intermediation revenue model?

A

Generating revenue by being a middleman between dealers.

Ebay, uber, airbnb

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5
Q

What is bootstrapping?

A

Building and growing a company using no external resources (without outside capital or funding)

Self-funding, profit reinvestment, organic growth

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5
Q

What are some bootstrapping strategies?

A

Work from home to save renting a office
Take as little of a salary for yourself as possible
Be frugal with your travel
Attend lots of networking events
Offer discounts to customers to ensure consistent cash flow
Dont give up day job until your business is productive and making proper money

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5
Q

What is a professional revenue model?

A

Generating revenue by providing professional services on a time and materials contract

Consultants, lawyers, accountants, doctors

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5
Q

What is a franchise revenue model?

A

generating revenue by selling franchises of existing businesses to another party to trade under that same name.

Mcdonalds, holiday inn

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5
Q

What is a licensing revenue model?

A

Generating revenue by giving permission to other parties to use protected intellectual property in exchange for fees.

Lego harry potter

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6
Q

What is a utility and usage revenue model?

A

generating revenue by charging customers fees on how often goods and services are used

Pay as you go cell phone plan, water/electricity

The more you use the more you pay.

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6
Q

What are revenue drivers?

A

Customers - how many customers buy things from you?

Frequency - how often do they shop with you?

Selling process - how much time will you be able to sell, upselling / cross selling

Price - price per minute, if you raise / lower your price how will that affect your customer nunber?

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6
Q

What is a freemium revenue model?

A

generating revenue by mixing free basic service with premium or upgraded services

Spotify premium, amazon prime, youtube,

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6
Q

What are cost drivers?

A

Cost of good sold (COGS) - (variable costs)

Operating expensises - fixes costs like rent, employee salaries, utilities, admin, marketing, insurance, benefits…

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7
Q

What is crowdfunding as a bootstrapping strategy?

A

the process of raising cash for a new venture from a large audience (typically through the internet)

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8
Q

What is patronage model of crowdfunding?

A

Funding given without the expectation of a return on the investment

Pateron

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9
Q

What is lending model crowdfunding?

A

funding given by backers in the form of a loan

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10
Q

What is reward based model crowdfunding?

A

gifts or experiences given to backers as thanks for their funding support

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11
Q

What is investor model crowdfunding?

A

equity stake in the business given to backers for their support

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12
Q

What is crowdsourcing?

A

obtaining input (ideas, services, expertise, and information) from a large group of people. (often a online community)

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13
Q

What is equity financing?

A

the sale of shares of stock in exchange for cash.

Someone buys 10% of your comapny for a million dollars.

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14
Q

For trade offs entrepreneurs make, what would a “failure” be?

A

Little control over the company and well below the financial gain potential

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15
Q

For trade offs entrepreneurs make, what would a “King/queen” be?

A

Complete control over the company and well below the financial gail potential

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16
Q

For trade offs entrepreneurs make, what would “rich” be?

A

Little control of the company and close to financial gain potential

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17
Q

For trade offs entrepreneurs make, what would a “exception” be?

A

Complete control of the company and close to financial potential

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18
Q

What is the best trade off section for a entrepreneur to be in?

A

Exception, complete control of the company and close to financial potential

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19
Q

What potential did you meet for financial gains and how much control do you have over the company if you are a “failure” for trade offs?

A

Little control over the company
well below financial potentoial

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20
Q

What potential did you meet for financial gains and how much control do you have over the company if you are a “Rich” for trade offs?

A

Little control over the company
close to financial potential

21
Q

What potential did you meet for financial gains and how much control do you have over the company if you are a “Exception” for trade offs?

A

close to financial potential
complete control of the company

22
Q

What potential did you meet for financial gains and how much control do you have over the company if you are a “King/queen” for trade offs?

A

well below financial potential
complete control of the company

23
Q

What are some ways you can find your companies valutation?

A

At the beginning: find reference points in the industry
or by benchmarking

24
Q

What is benchmarking when trying to figure out a companies valuation?

A

Identify two competitors in the industry (either close competitors or best in the industry), then pick factors to compare your company to the two others

25
Q

How would investors specifically value startups?

A

your companies uniqueness
long term potential (sustainable)
intial required investment
team size
patents
projected revenue

26
Q

Who are angel investors?

A

high net worth individuals ($1 million net worth, $200,000 annual net income)

27
Q

When do angel investors typically invest in a company?

A

in the seed (very first funding stage) and startup stages

(really early on)

28
Q

What are venture capitalists?

A

professioal investors who manage funds that are dedicated to investing in startups for high growth

29
Q

When do venture capitalists typically invest in a company?

A

They invest in both early and in later stages of a company

30
Q

What role do general partners make in the venture capital firms?

A

general partners manage the fund

31
Q

What role do limited partners have in venture capital firms?

A

limited partners is where venture capital firms get their money to then invest.

32
Q

What do venture capitalists look for in firms they want to invest in?

A

time to exit or liquidity event (acquisition or IPO)

They want to cash out of their investment

33
Q

What is a sole proprietorship?

A

one owner
no seperation between the owner and the business
unlimited liability
simplist and more inexpensive

34
Q

What is a general partnership?

A

at least two owners
the two owners share the profits and losses
unlimited liability

if there was $100 in debt and there is a 95% and 5% split in ownership, you both are liable for the $100 regardless of percentage.

Cheaper than becoming a corporation

35
Q

What is a limited liability company (LLC)?

A

owners are memberes, managers dont necessarly own the businsess

only the owners are liable for the businesses debt, up to their stake in the company.
if theres $100 in debt and you own 10%, you are only liable for $10.

limited liability.

36
Q

What is a limited partnership?

A

one or more general partners, and one or more limited partners

37
Q

What is a general partner in a limited partnership?

A

general partners manage the partnership

38
Q

what is a limited partner in a limited partnership?

A

passive / silent investors

39
Q

Who is liable for the debt of the limited partnership?

A

general partners: all assets are at risk
limited partneres: only to the extent of their investment in the business

40
Q

What is a corporation?

A

a legal entity that is seperate from its owners

41
Q

What kind of liability do coprorations have?

A

Limited liability the corporation is only legally liable for its actions, the shareholders are liable only to their shares

42
Q

What is a C corp?

A

Unlimited number of shareholders
double taxation

43
Q

What is a S corp?

A

max 100 shareholders
stockholders elect special treatment for income tax purposes

44
Q

What is a B corp?

A

balancing pure profit and social benefit goals

45
Q

What is a mistake that startups make>

A

they choose the wrong business structure

46
Q

What is a trade secret?

A

any confidential information that provides companies with a competitive edge.

47
Q

What are trade secrets protected by?

A

It is only protected by common law, not protected by reverse engineering, accidental leakage, or competitor unmasking

48
Q

What is competitor unmasking?

A

When a trade secret is uncovered by competitors.

49
Q

If an employee gets drunk and accidentally leaks a trade secret, is that protected?

A

There is no violation of common law since they accidentally leaked it

50
Q

What is a patent?

A

A contract between a invention / inventor and the government

51
Q

What is a utility patent?

A

Related to how things work, the most common type of patent.

52
Q

What is a design patent?

A

Related to how things look
apples iphone deisn,
Canada does not have this type of patent

53
Q

What is a plant patent?

A

a patent relating to plants, canada also does not have this type of patent.

54
Q

What must a item be to be considered for a patent?

A

Useful, novel, and non-obvious

55
Q

What are some characteristics of patents?

A

Bounded
Territorial - only protected in the country you applied in
Can expire - typically 20 years
Not renewable

56
Q

What is a copyright?

A

a form of protection provided to the creates of original works

57
Q

What is not copyrightable?

A

Ideas
works containing information of common property (not original)
titles of books, movies, brand names, or names

58
Q

When does copyright expire?

A

the life of the author + 70 years after the death
company with no author: 95 years from the fist publication or 120 years from the year of creation, whatever expires first

59
Q

What is a trademark?

A

Any word, letter, sound, or design used in business to identify and promote a product is a trademark.
Visual, sound ,smell

Renewable (10 years)

60
Q

What are common IP traps?

A

Publicly disclosing your innovation
Failure to protect product and process
inability to determine originality
failure to assign ownership
failure to protect IP in global markets

61
Q

What is global IP theft?

A

When you create a product, trademark, copyright, trade secret that is dependent on IP protections.
Then someone from another country copies your work (violating IP law), but you cant do anything about it because your protection is just within your country.

62
Q
A

ENTR 2030 (2 decks)

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