No student devices needed. Know more
30 questions
What is an entrepreneur?
A person who starts a new business and assumes all the risks and rewards of running it.
A person who invests their money into a company but assumes no risk of running the business.
A company employee who is responsible for developing new products for the company.
A company employee who is responsible for managing operations.
A(n) _________ is a person who starts a new business and assumes all the risks and rewards of running the business.
Angel investor
Venture capitalist
Manager
Entrepreneur
Which of the following statements about entrepreneurs is FALSE?
Entrepreneurs are people who start a new business.
Entrepreneurs assume all the rewards of starting a new business.
Entrepreneurs aren’t exposed to any risk when starting a new business.
Entrepreneurs often come up with new ideas for their business.
Which of the following statements about entrepreneurs is TRUE?
Entrepreneurs are not willing to take risk.
Entrepreneurs use traditional, old methods when they start a new company.
Both A and B
Neither A nor B
Which of the following statements about entrepreneurs is FALSE?
Entrepreneurs try to solve problems by using new products and processes.
Entrepreneurs are not willing to take risk.
Both A and B
Neither A nor B
What are some common traits good entrepreneurs have?
They take calculated risks.
They try to solve problems by using new products and processes.
Both A and B
Neither A nor B
If an entrepreneur says they are using “bootstrap financing,” what are they referring to?
They took a bank loan to help pay for their startup costs.
They are looking for private investors for their company.
They used their own money to start their business.
They are looking to go public on the stock market.
What method of financing do entrepreneurs often use when they are first developing their business idea?
Angel investing
Initial Public Offering
Bootstrapping
Venture capital
Imagine you are an entrepreneur starting a new video game company. What kind of financing would you most likely use to test out your new business idea?
Debt financing
Bootstrapping
Venture capital
Angel investing
What is the difference between debt financing and equity financing?
Startups are often able to get debt financing much easier than equity financing.
Equity financing involves selling shares of ownership in the company while debt financing does not.
Equity financing often involves paying interest while debt financing does not.
None of the above
Which of the following statements about debt financing is FALSE?
Debt financing comes from banks or other commercial lenders.
When a bank gives a company a loan, they become partial owners of the company.
Companies often have to pay interest when they use debt financing.
It’s harder for startups to get debt financing.
Which of the following statements about equity financing is FALSE?
Companies often have to pay interest when they use equity financing.
Equity financing is a popular option for startups.
Equity financing is when a company sells shares of ownerships to investors in order to raise money.
Equity financing can come from angel investors, venture capitalists, or the stock market.
Imagine you’ve used your own money to develop your business idea. Now you need more funding to keep growing. Which financing method would be available to you at this stage?
Debt financing
Angel investing
Venture capital
Going public
Imagine you own a successful startup company that’s been doing well for several years. You think you can grow your company if you had more industry connections. What method of financing would be best for your company at this stage?
Debt financing
Angel investing
Venture capital
Going public
Imagine you own an established startup with growing profits. You are looking for funding to greatly expand company operations. What method of financing would be best for you?
Debt financing
Angel investing
Venture capital
Going public
In finance, the acronym IPO stands for:
Investment Portfolio Option
Interest Producing Obligation
Initial Public Offering
Income Profit Opportunity
An _______ is when a private company offers stock to the public for the first time.
Income Profit Opportunity
Investment Portfolio Option
Interest Producing Obligation
Initial Public Offering
When a private company wants to offer stock on the stock market, they go through the _______ process.
Income Profit Opportunity
Initial Public Offering
Interest Producing Obligation
Investment Portfolio Option
When a company “goes public,” only a small amount of investors are allowed to invest in the company.
True
False
When a company “goes public,” investors anywhere can buy shares of ownership in the company.
True
False
When a startup wants to offer stock on the stock market, they go from a private to a public company.
True
False
Which of the following is a disadvantage of going public?
Ability to raise a lot of money
Losing some control over company decisions
Gaining public exposure for your company
Ability to attract many investors
Which of the following are disadvantages of going public?
Giving up some ownership
Need to meet expensive legal requirements
Both A and B
Neither A nor B
Which of the following is an advantage of going public?
Need to meet expensive legal requirements
Giving up some ownership
Losing some control over company decisions
Ability to attract many investors
Which of the following steps is NOT involved in going public?
Coming up with a ticker symbol
Forming a Board of Directors
Finding private investors to invest
Writing a registration statement for the Securities and Exchange Commission
When a company is attempting to go public, they will hire an investment bank to…
Figure out how much money to raise
Find private investors
Create a prospectus
Both A and C
Which of the following statements about the IPO process is FALSE?
Companies must form a Board of Directors to represent investor interests.
Companies must seek out private investors for the company.
Companies must figure out how much money they want to raise.
Companies must come up with a ticker symbol.
Companies already on the stock market get to choose the price of their stocks.
True
False
When companies go public they get a direct say in choosing the price of their stocks.
True
False
The price of company stocks already trading on the stock market are determined by supply and demand.
True
False
Explore all questions with a free account