11 Questions
What is not a fundamental principle of the entrepreneurial process?
Risk management
In terms of survival rates, how do start-ups compare to established SMEs?
Less likely to survive
Which is NOT a challenge of entrepreneurial finance (EF) for entrepreneurs and investors?
Investors only consider proposals with low risks
Why is entrepreneurial finance (EF) important?
EF is a key human resource for start-up
According to the FUEL framework, which step is NOT part of the process?
What is the investor staged financing
In the FIRE framework, what is the correct sequence of the four steps?
Invest in Startups, Matching entrepreneurs and investors, Entrepreneur and investor both help grow the company, EF investment returns are realized
What is the most important decision criterion in the Venture Evaluation Matrix?
Scale and growth both
What does the Team cell look into in the Venture Evaluation Matrix?
The founder’s commitment to the venture
Why is the founders’ intrinsic motivation important?
It makes founders more resilient during testing times
Why do investors assess an innovation’s potential market growth?
They need to achieve a gain from the investment in a reasonably short period
Which item is not evaluated in the Venture Evaluation Matrix?
Investors
Study Notes
Entrepreneurial Process
- Risk management is not a fundamental principle of the entrepreneurial process.
Start-ups vs. Established SMEs
- Start-ups are less likely to survive compared to established SMEs.
Entrepreneurial Finance (EF) Challenges
- EF challenges for entrepreneurs and investors include getting EF funded, diversity of EF investors with different characteristics and requirements, and long and costly investment process.
- Banks are not reluctant to finance start-ups due to high risk.
Importance of Entrepreneurial Finance (EF)
- EF is a key financial resource for start-ups from the entrepreneur's perspective.
- EF provides portfolio diversification benefits from the investor's perspective.
- EF creates jobs, innovation, and economic growth from the economic perspective.
- EF is not a key human resource for start-ups from the entrepreneur's perspective.
FUEL Framework
- The four steps of the FUEL framework include who the investor is, what the investor wants, what the investor contributes, and how the investor operates.
- What is the investor staged financing is not part of the FUEL framework.
FIRE Framework
- The four steps of the FIRE framework, in order, are matching entrepreneurs and investors, invest in start-ups, entrepreneur and investor both help grow the company, and EF investment returns are realized.
Venture Evaluation Matrix
- The most important decision criterion in the Venture Evaluation Matrix is scale and growth.
- The Team cell in the Venture Evaluation Matrix looks into the founder's commitment to the venture.
- The Venture Evaluation Matrix can provide guidance to entrepreneurial choices by forcing entrepreneurs to reflect on the economic appeal of their venture.
- Investors assess an innovation's potential market growth because they need to achieve a gain from the investment in a reasonably short period.
Financial Projections
- A venture's profitability can be gleaned from the income statement.
- Net working capital is a key performance indicator that entrepreneurs and investors can obtain from balance sheet projections.
- The financial plan does not address who will provide money to the venture.
- Financial projections make entrepreneurs reflect on the venture's business model.
Test your knowledge on entrepreneurship with these multiple-choice questions covering fundamental principles, start-up survival rates, and entrepreneurial finance challenges. Answer all the questions to see how well you understand the entrepreneurial process.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
