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

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