Podcast
Questions and Answers
What is not a fundamental principle of the entrepreneurial process?
What is not a fundamental principle of the entrepreneurial process?
- Experimentation
- Risk management (correct)
- Networking
- Gathering resources
In terms of survival rates, how do start-ups compare to established SMEs?
In terms of survival rates, how do start-ups compare to established SMEs?
- More likely to survive
- Equally likely to survive
- Less likely to survive (correct)
- Survival rates are unpredictable
Which is NOT a challenge of entrepreneurial finance (EF) for entrepreneurs and investors?
Which is NOT a challenge of entrepreneurial finance (EF) for entrepreneurs and investors?
- Getting EF funded often considered hard for start-up
- Banks are reluctant to finance start-up due to high risk
- Investors only consider proposals with low risks (correct)
- Diversity of EF investors with different characteristics and requirements
Why is entrepreneurial finance (EF) important?
Why is entrepreneurial finance (EF) important?
According to the FUEL framework, which step is NOT part of the process?
According to the FUEL framework, which step is NOT part of the process?
In the FIRE framework, what is the correct sequence of the four steps?
In the FIRE framework, what is the correct sequence of the four steps?
What is the most important decision criterion in the Venture Evaluation Matrix?
What is the most important decision criterion in the Venture Evaluation Matrix?
What does the Team cell look into in the Venture Evaluation Matrix?
What does the Team cell look into in the Venture Evaluation Matrix?
Why is the founders’ intrinsic motivation important?
Why is the founders’ intrinsic motivation important?
Why do investors assess an innovation’s potential market growth?
Why do investors assess an innovation’s potential market growth?
Which item is not evaluated in the Venture Evaluation Matrix?
Which item is not evaluated in the Venture Evaluation Matrix?
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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.
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