Entrepreneurship 4: Financing and Profitability Quiz Answers

All Weeks Entrepreneurship 4: Financing and Profitability Quiz Answers

Entrepreneurship 4: Financing and Profitability Week 1 Quiz Answers

Quiz 1: Building a Business Model and a Customer Base Quiz

Q1. According to many entrepreneurs, what is the one key rule for success in entrepreneurship?

• Develop a robust business plan
• Find the right business partner
• Hire the right people
• Don’t run out of cash

Q2. What is an example of a disruptive business model?

• Foxconn
• Peapod
• Warby Parker
• Samsung

Q3. How is a business model different than a general strategy?

• A business model is an outcome of a strategy
• A strategy is a component of a business model
• A business model is not different than a general strategy
• A business model is a description, but a strategy is an action

Q4. Which of the following is not a kind of business model:

• Value Chain
• Disruptive
• Architecture
• Influencer

Q5. Why are business models important? (Check all that apply)

• They act as a checklist to make sure you are planning properly
• They accurately predict your profit
• They are asked for in bank loan applications
• They tell a story of how your company makes money

Q6. What is the best strategy for customers who are low value but active?

• Foster loyalty
• Minimize effort targeting these customers
• Targeted promotions
• Increase transactions

Q7. What is the CLV (net of acquisition cost) if customer acquisition cost is $600 and expected contribution is $350 per period for a total of 5 periods?

• $850
• $1,150
• $600
• $1,500

Q8. What is the CLV (net of acquisition cost) if customer acquisition cost is $600, expected contribution is $350 per period, and retention rate is 70% per period for a total of 5 periods (round to the nearest whole dollar)?

• $371
• $340
• $440
• $393

Q9. What is the CLV if the return is $350 per period, churn is 0.3, and discount rate is 0.1 for an indefinite number of periods?

• $1000
• $1,166
• $875
• $833

Q10. Research shows entrepreneurs are willing to accept a discount to work with a prestigious venture capital firm. According to Joseph Ansanelli, why are entrepreneurs choosing to do this rather than choosing other sources of capital?

• They value the specific experience and knowledge of an individual partner in the venture capital firm
• The venture capital firm can help them recruit talent
• The venture capital firm can help them connect to potential customers
• All of these are reasons to work with a prestigious venture capital firm at a discount

Entrepreneurship 4: Financing and Profitability Week 2 Quiz Answers

Quiz 1:Financing Methods and Valuation Quiz

Q1. On average, what is the largest source of funding for startups?

• Angel
• Self-funding
• Venture Capital
• Friends and Family

Q2. Who would typically use a convertible note when funding your business?

• Credit Card Companies
• Venture Capitalists
• Small Business Lenders
• Friends and Family

Q3. Which of the following statements about angel investments is true?

• Angel investors want equity in your company
• Angel investors are generally wealthy individuals interested in investing in startups
• All of these statements are true
• Angel investors are mostly interested in the seed stage

Q4. Which of the following financing pathways are NOT dilutive sources of funding?

• Venture Capital
• Super Angels
• Bank Loans
• Angel Investors

Q5. With each round of fundraising, approximately what portion of the company equity is given up?

• 10%-20%
• 10%-30%
• 10%-40%
• 10%-50%

Q6. Which of the following financing options typically provides the largest amount of investment?

• Accelerators
• Venture capital
• Super Angel
• Angel Investors

Q7. In 2012, which of the following areas received significantly more investments from angel investors than from venture capitalists?

• Retailing/distribution
• Consumer products and services
• Biotechnology
• Software

Q8. What is the post-money valuation if the pre-money value is $2M and an investor invests $4M?

• $6M
• $8M
• $4M
• $2M

Q9. Which of the following statements about convertible debt is not true?

• Investors who agree to convertible notes usually receive a discount in the very early stage of a business
• Although technically debt, convertible notes convert to equity later
• Convertible debt allows startups to raise money while delaying the valuation discussion
• Investors will not be able to put a limit on the valuation at which investors’ notes convert to equity

Q10. If a company raises a $5 million Series A round from an investor at a $20M post-money valuation, and later the company raises $10M at a $100M valuation, how much more must the investor invest to keep his/her original stake?

• $5M
• $1M
• $10M
• $2.5M

Entrepreneurship 4: Financing and Profitability Week 3 Quiz Answers

Quiz 1:Choosing Financing, and Calculating Breakeven Quiz

Q1. Which of the following are forms of startup financing?

• Venture capital and angel investors
• All of these are forms of startup financing
• Crowdfunding and bootstrapping
• Government grants and commercial banks

Q2. Two conceptual problems that plague the financing of startup type markets include ___ and ___.

• Negotiations; due diligence
• Valuation; bootstrapping
• Hidden information; hidden action
• Asymmetrical information; due diligence

Q3. Which of the following is true?

• Venture capital performance is almost always successful
• Entrepreneurs always take the highest financial valuation offer
• None of these are true
• Venture capitalists with a high reputation are three times more likely to have their offers accepted

Q4. As the founder of a company, you are more likely interested in which two types of crowdfunding?

• Charity and peer-to-peer lending
• Equity and reward based
• Peer-to-peer lending and equity
• Reward based and charity

Q5. To get the most out of crowdfunding, you should do the following EXCEPT ___.

• Hire outside consultants
• Understand your target audience
• Produce high quality videos
• Appeal to online communities

Q6. Which of the following is true about debt financing?

• Debt is generally less costly to founders
• None of these are true
• Debt requires you to give up an ownership interest
• Debt is usually subordinate to equity

Q7. All of the following are forms of debt financing EXCEPT ___.

• Factoring
• Convertible notes
• Venture capital
• Equipment financing

Q8. The burn rate is the ___.

• Net negative cash flow per unit time
• Total expenditure per month
• Projected balance of cash out into the future
• Amount of cash you have on hand before you run out of money

Q9. Breakeven time refers to ___, whereas breakeven quantity refers to ___.

• Time to payback original investment; units per time required to make a profit
• Time to positive cash flow; units per time required to make a profit
• Time to pay back original investment; units per time required to recover fixed cost
• Time to positive cash flow; units per time required to recover fixed cost

Q10. Which of the following is an issue with calculating breakeven?

• Margin cannot be calculated
• Does not take variable costs into account
• Assumes fixed level of spending
• Cannot be calculated for non-physical items

Entrepreneurship 4: Financing and Profitability Week 4 Quiz Answers

Quiz 1:Strategies for the Pitch and the Exit Quiz

Q1. What is the goal for your pitch deck?

• To get to the next set of conversations
• To raise money
• To detail everything there is to know about your company
• To convince investors they will miss out if they do not invest

Q2. How should you NOT emphasize your solution in your pitch deck?

• Describe customers using your product
• Explain the benefits to the customers
• Be super product focused
• Use pictures and stories

Q3. Good executive summaries should ___.

• Include names of all the notable people you know
• Overstate numbers to make the opportunity look more attractive
• Be adapted according to what the investors already know
• Describe financials and your entire model in detail

Q4. All of the following are true of pro forma financial statements EXCEPT ___.

• They are an accounting of your actual financial performance
• They are usually supported by a more detailed budget for the next 12 months
• Analysis is generally done by month
• They include three standard forms: income statement, cash flow statement, and balance sheet

Q5. In preparing pro forma financial statements, start with the ___.

• Balance sheet
• Statement of equity
• Cash flow statement
• Income statement

Q6. Revenue and cost numbers in the model should be ___.

• Entered directly based on best estimates
• Multiplied by a constant multiplier from historical data
• Based on operating parameters of the business
• Based on numbers that are needed to achieve the desired results

Q7. All of the following are examples of stakeholder liquidity or exits EXCEPT ___.

• Debt financing
• Initial public offerings
• Buyout of shares
• Mergers and acquisitions

Q8. If organizational synergies and faster resource acquisition are more important to you, you may want to consider ___.

• Mergers and acquisitions
• Buyout of shares
• Initial public offerings
• Private ownership

Q9. A public offering may have potential disadvantages such as ___.

• All of these are true
• Higher costs, both direct and indirect
• It provides competitors with insight into your competitive position
• It is hard to time the market, and there is no objective threshold

Q10. If innovation is more important to you, you may want to consider ___.

• Private ownership
• Mergers and acquisitions
• Initial public offerings
• Buyout of shares

Get All Course Quiz Answers of Entrepreneurship Specialization

Entrepreneurship 1: Developing the Opportunity Quiz Answers

Entrepreneurship 2: Launching your Start-Up Quiz Answers

Entrepreneurship 3: Growth Strategies Coursera Quiz Answers

Entrepreneurship 4: Financing and Profitability Quiz Answers