Book Title:
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Some examples from this set of practice questions
1.
Define Entrepreneurial finance
Answer: mix of entrepreneurship (intuition, experimentation) and corporate finance (numbers, logic)
2.
Why is financing for an Entrepreneur difficult? Name 4 points.
Answer: - Getting funded is considered difficult - Considering investors with different characteristics (+difficult to contact) - Money is a key resource - Investors impact the company
3.
Why is financing for an investor difficult? Name 4 points.
Answer: - A lot of proposals - Long and costly process - Returns (or strategic objectives) - Pass on knowledge and expertise
4.
What are the 4 points of the FIRE framework?
Answer: Fit: matching entrepreneur with investors Invest: closing a deal Ride: the path forward with all surprises Exit: investors sell shares to obtain return on their investment
5.
Explain the FUEL framework
Answer: Fundamental structure: who is the investor Underlying motivation: what does he want Expertise and networks: what does he contribute Logic and style: how does he operate
6.
What are the 3 main types of investors?
Answer: - VC (venture capitalist) = raising funding from institutional investors - Founders = savings, credit - External = 3 f’s (friends, family, fools), Angel investors, corporations, intrapreneurs, crowdfunding, peer-to-peer.
7.
Name 3 types of business risk
Answer: 1. Market risk (customer need not strong enough, not large enough, company fails to reach) 2. Technology risk (fails on technical grounds, protected, fails to deliver) 3. People risk (weakness of team leaders, networks, ability to grow the organization)
8.
What is due diligence?
Answer: research before making an investment decision
9.
Name the 3 financial projections
Answer: 1. Income Statement (IS): business model and profitability Costs, revenues, profitability measures (flows) 2. Balance Sheet (BS): size, asset base structure, financing Assets and financing (types); net income links to IS (stocks) 3. Cash Flow Statement (CF): cash changes from IS and BS Financing needs, their amount and timing
10.
Primary data research = filtered and prepared. True of false?
Answer: False
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