quiz12_with Answers

quiz12_with Answers - Chapter 12 Informal Risk Capital and...

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Chapter 12 Informal Risk Capital and Venture Capital True/False Questions 1. Conventional small businesses have an easier time obtaining external equity capital that high-technology firms. Answer: False Page: 348 Difficulty: Medium 2. Early-stage financing is usually the most costly type of financing to obtain. Answer: True Page: 348 Difficulty: Easy 3. Venture capital firms generally prefer a minimum funding level of $5,000. Answer: False Page: 348 Difficulty: Medium 4. Development financing is usually harder to obtain than early stage financing. Answer: False Page: 349 Difficulty: Medium 5. The public equity market is available only for high-potential ventures. Answer: True Page: 349 Difficulty: Medium 6. Business angels are members of a professionally managed group of wealthy individuals who efficiently distribute risk capital. Answer: False Page: 350 Difficulty: Hard 7. The informal investment market contains the largest pool of risk capital in the U.S. Answer: True Page: 350 Difficulty: Medium 8. Most angel investors are individuals who accumulated their wealth through inheritance. Answer: False Page: 350 Difficulty: Medium 9. Angel investors have a longer investment horizon than venture capitalists do. Answer: True Page: 351 Difficulty: Hard Hisrich, Entrepreneurship, Sixth Edition 99
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Chapter 12 Informal Risk Capital and Venture Capital 10. Venture capital firms are pools of equity managed by a general partner. Answer: True Page: 353 Difficulty: Medium 11. The Small Business Investment Company Act of 1958 married the use of private capital with government funds to finance small businesses. Answer: True Page: 353 Difficulty: Medium 12. In private venture capital firms, limited partners provide the funding and the general partner manages the fund. Answer: True Page: 354 Difficulty: Easy 13. State-sponsored venture-capital funds are generally more successful than private venture capital funds. Answer: False Page: 355 Difficulty: Medium 14. In the 1990s there was a decrease in the number and amount of venture capital deals made. Answer: False Page: 356 Difficulty: Medium 15. Most venture capital deals have been made in California and Massachusetts. Answer: True Page: 359 Difficulty: Easy 16. Most venture capital investments are for first round seed financing of new ventures. Answer: False Page: 359 Difficulty: Medium 17. There is less risk involved in financing a business's early operations, therefore, lower rates of return are expected. Answer: False Page: 398 Difficulty: Medium 18. A venture capitalist would rather invest in a first-rate product and a second-rate management team than the reverse. Answer: False Page: 360 Difficulty: Medium 100 Hisrich, Entrepreneurship, Sixth Edition
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Chapter 12 Informal Risk Capital and Venture Capital 19. To attract venture capital funding, an investment must have significant capital appreciation potential. Answer: True
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This note was uploaded on 02/21/2012 for the course ACT 492 taught by Professor Ngo during the Fall '11 term at Colorado.

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quiz12_with Answers - Chapter 12 Informal Risk Capital and...

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