Question 2
After having successfully obtained a Bachelor degree in management, you started working for a
young startup company that is developing a new generation of cell phones with a breakthrough
technology. The marketing research proved that the size of the potential market for this product is
large enough to start initial sales. For this, the company needs one million dollars and you are
now wondering how to raise that capital. Since the company is a hightech startup, you think
venture capital (VC) is the most appropriate form of financing. You know that governmentVC
funds (such as the Business Development Bank of Canada or Export Development Canada) or
Labour Sponsored Venture Capital funds (LSVCCs, such as Fonds de solidarité) are more
accessible than private independent (PI) funds. However, you heard a rumor that government
funds and LSVCCs tend to provide smaller amounts of capital than PIs.
a. To address this point, you randomly collected data on 14 hightech companies that obtained
venture capital over the last 2 years; 6 obtained VC from government funds (EDC/BDC), 5 from
LSVCCs, and other 4 from PIs. Using the data in Assignment3_Q1a.xls, assess “manually”
whether the average amounts of VC raised through the three different types of VC funds are the
same or different, at the 5% significance level, in accordance with the following steps:
i. State the hypotheses.
ii. Calculate “manually” each of the following quantities: SST, MST, SSE, MSE, SSTotal, degrees
of freedom for MS, degrees of freedom for MSE, and FStatistics, and complete the ANOVA
table below. For each of those quantities, present two equations:

The formula being used. e.g.,
SST=
Note that some formulae are simpler to use than others.

One equation of substituting values into the formula and the result, e.g.,
SST= 26(
Note: “Manually” means you may not calculate the various quantities using MiniTab or any
other statistical software. However, you may use Excel.
ANOVA Table
Source
SS
DF
MS
F
Treatment
Error
Total
iii. State the conclusion with reasoning.
iv. Perform followup tests with Bonferroni method, if appropriate.
b. You know that a sample of 15 observations is too small. A professor at Telfer provided you a
larger sample of amounts of venture capital raised by 266 Canadian startups
(Assignment3_Q1b.MTW).
Using Minitab (or any other statistical software), perform the appropriate statistical test to assess