31 Questions
What are the three primary types of social entrepreneurship?
Social purpose ventures, social consequence entrepreneurship, and enterprising nonprofits
How can social entrepreneurs fund their ventures through capital markets?
Seeking funding from social venture capitalists (SVC), community-funded VC, and microlending
What is the primary difference between corporate social responsibility and social entrepreneurship?
Corporations seek to incorporate social initiatives into broader strategic and tactical objectives, while social entrepreneurs put social issues front and center
What is the Audacious Project launched by TED?
An initiative that provides social entrepreneurs with a platform to present their ideas to respected names in philanthropy
What are the wicked problems that social entrepreneurship can help resolve?
Water shortages, education, health care, poverty, energy, forced migration, and global warming
What is the primary role of stakeholders in a social venture?
All those involved in and affected by the activities of a social venture
What are the available sources of capital for social entrepreneurs?
Social venture capitalists (SVC), community-funded VC, and microlending
What is the objective of the enterprise in corporate social responsibility?
Incorporating social initiatives into broader strategic and tactical objectives
What is the main focus of social entrepreneurs?
Putting social issues front and center
What is the primary purpose of The Audacious Project launched by TED?
Providing social entrepreneurs with a platform to present their ideas to respected names in philanthropy
What is the purpose of financial projections for startups?
To frame the opportunity from the perspective of the target market(s), understand the required resources, and know how to allocate those resources under varying market conditions
Which financial statement measures performance on a monthly or annual basis?
Income statement
What does the balance sheet show?
What the company owns and what it owes at a given point in time
What does the cash flow statement assess?
The inflows and outflows of money over a period of time
What is the cash conversion cycle?
The number of days a company’s cash is tied up in the production and sales process
How is the cash conversion cycle calculated?
By adding the days sales outstanding (DSO) to days of inventory (DOI), then subtracting days payable outstanding (DPO)
Why are all three financial statements needed to provide a complete picture of the company's financial situation?
Because each statement provides a different view of the company and they are all necessary to understand the company's financial health
What is the purpose of financial projections for startups?
To frame the opportunity from the perspective of the target market(s), understand the required resources, and know how to allocate those resources under varying market conditions
Which financial statement measures performance on a monthly or annual basis?
Income statement
What does the balance sheet show?
What the company owns and what it owes at a given point in time
What does the cash flow statement assess?
The inflows and outflows of money over a period of time
What should pro forma financial statements include?
At least three scenarios: best case, worst case, and likely case, each manipulating revenue and cost drivers
What are some common legal structures for startups?
Sole proprietorship, general partnership, C corporation, S corporation, LLC
What is crucial for startups in terms of intellectual property (IP)?
Protection of IP through nondisclosure agreements
What is a common legal error made by startups?
Choosing the wrong legal structure
How does entrepreneurial marketing differ from traditional marketing?
By focusing on engagement, relationships, and community building
What are the principles of marketing for new ventures?
Identifying needs, serving them, communicating value, supplying products, and supporting customer relationships
What is important for creating a product or service identity that resonates with consumers emotionally and builds trust?
Branding
What do legal considerations add to entrepreneurial ventures?
Value
What are the assumptions when building pro forma statements?
Operating policies, taxes, interest, inflation, and ramp-up time
What are the legal requirements for hiring employees?
Registering with the state labor department and compliance with safety regulations
Study Notes
Entrepreneurial Ventures and Legal Considerations
- Pro forma financial statements should include at least three scenarios: best case, worst case, and likely case, each manipulating revenue and cost drivers.
- Assumptions when building pro forma statements include operating policies, taxes, interest, inflation, and ramp-up time.
- Understanding legal considerations can add value to entrepreneurial ventures, and obtaining competent legal advice can improve performance.
- Common legal structures for startups include sole proprietorship, general partnership, C corporation, S corporation, LLC, and others.
- Common legal errors made by startups involve choosing the wrong legal structure, not having written agreements, and neglecting vesting schedules.
- IP, including inventions and trademarks, is crucial for startups, and protection can be achieved through nondisclosure agreements.
- IP theft globally costs the United States between $250 and $600 billion annually.
- Entrepreneurs often fall into traps related to IP, such as public disclosure of inventions and failure to protect products.
- Legal requirements for hiring employees involve registering with the state labor department and compliance with safety regulations.
- Entrepreneurial marketing differs from traditional marketing by focusing on engagement, relationships, and community building.
- Principles of marketing for new ventures include identifying needs, serving them, communicating value, supplying products, and supporting customer relationships.
- Branding is important for creating a product or service identity that resonates with consumers emotionally and builds trust.
Test your knowledge of entrepreneurial ventures and legal considerations with this quiz. Explore topics such as pro forma financial statements, legal structures for startups, intellectual property protection, hiring requirements, and entrepreneurial marketing principles. Assess your understanding of key concepts and best practices for navigating legal considerations in entrepreneurship.
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