test14 - Chapter 14Enterpreneurial Finance and Venture...

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Chapter 14—Enterpreneurial Finance and Venture Capital MULTIPLE CHOICE 1. Entrepreneurial growth companies a. usually consume more cash than they generate. b. usually have tangible assets as a large part of their values. c. usually have low risk for investors. d. usually compensate employees with large salaries. ANS: A DIF: E REF: 14.2 Venture Capital Financing in the United States 2. Formal business entities with full-time professionals who seek out and fund promising ventures are a. angel capitalists b. institutional venture capital funds c. vulture funds d. business incubators ANS: B DIF: E REF: 14.2 Venture Capital Financing in the United States 3. With few exceptions over time, ________________________________ have generally provided more total funding to entrepreneurial companies each year. a. angel capitalists b. institutional venture capital funds c. vulture funds d. government sponsored enterprises ANS: A DIF: E REF: 14.2 Venture Capital Financing in the United States 4. Which of the following institutional venture capital fund categories controls the dominate share of in- dustry resources? a. small business investment companies b. financial venture capital funds c. corporate venture capital funds d. venture capital limited partnerships ANS: D DIF: E REF: 14.2 Venture Capital Financing in the United States 5. A rapidly growing source of new money for institutional venture capital funds is a. bank loans b. pension funds c. individuals d. government grants ANS: B DIF: E REF: 14.2 Venture Capital Financing in the United States 6. Pensions are well-suited to the institutional venture capital fund area of investing because a. pension fund managers are able to take more risk like venture capital fund managers. b. pension fund managers are able to hold investments with longer time horizons like venture
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fund managers c. pension fund managers do not face investor scrutiny like other fund managers. d. pension fund managers need high risk/high return investments to boost fund returns as the baby boom generation reaches retirement. ANS: B DIF: E REF: 14.2 Venture Capital Financing in the United States 7. A growing firm seeks $30 million to develop and market its promising new technology. An institu- tional venture capital fund steps in with an $8 million initial investment. This is an example of a. low base financing b. staged financing c. scaled financing d. intermitent financing ANS: B DIF: E REF: 14.3 The Organization and Operations of U.S. Venture Capital Firms 8. Venture capitalists use staged financing a. to limit other investors’ returns. b. to increase the venture capitalist’s ownership stake. c. to reduce the venture capitalist’s risk exposure. d.
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This note was uploaded on 08/26/2011 for the course ECON 222 taught by Professor Min during the Spring '11 term at American University of Kuwait.

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test14 - Chapter 14Enterpreneurial Finance and Venture...

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