Exam (elaborations)
Entrepreneurial Finance
- Course
- Institution
- Book
Entrepreneurial Finance
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
SOLUTION MANUAL For Entrepreneurial Finance, 7th Edition by J. Chris Leach, Ronald W. Melicher, Chapters 1 - 16, Complete With CAPSTONE CASES
-
Entrepreneurial Finance
-
Entrepreneurial Finance
Seller
Follow
kushboopatel6867
Reviews received
Content preview
SOLUTION MANUAL For Entrepreneurial Finance, 7thEdition by J. Chris Leach, Ronald W. Melicher
A successful entrepreneur: - ANSWER: -sees and seizes a commercial opportunity
-tends to be optimistic
-plans to obtain physical, financial and human resources needed for venture to
succeed
Principles of Entr Finance: #1 - ANSWER: real, human and financial capital must be
rented from owners
-the time value of is an importnat component of the rent one pays for using
someone elses financial capital
-when you rent the money, it cant be rented to others, and you must expect to
compensate the money owner for that loss
Principle #2 - ANSWER: Risk and Expected reward go hand in hand
-higher the risk, the higher the interest rate (cost of borrowing), provides higher
reward for the lender (pay-day-loans)
Principle #3 - ANSWER: while accounting is the language of business, cash is the
currency
-entrepreneurs need to be able to quantify certain aspects of their ventures future
and translate them into approprriate financial statements
-entrepreneurs underestimate cash needed and overestimate revenue generated
Principle #4 - ANSWER: new venture financing involves search, negotiation and
privacy
-find investors, negotiate price/return, and keep it private
Principle #5 - ANSWER: a ventures financial objective is to increase value
-value can be financial, social and environmental
-how does your venture add value?
Free Cash: - ANSWER: the cash exceeding that which is needed to operate, pay
creditors and invest in the assests
Free Cash Flow: - ANSWER: is the change in free cash over time
Principle #6 - ANSWER: it is dangerous to assume that people act against their own
self interest
-aligning incentives (investors, founders, employees and spouses) is critical
-when situations change, incentives diverage and renegotiation is important
, Principle #7 - ANSWER: venture character and reputation can be an asset or liability
-high ethical standards
-ventures can have character that can be different from the individuals who founded
or manage it
-many entrepreneurs are involved in charitable endeavors
Entrepreneurial Finance: - ANSWER: is the application and adaptation of financial
tools, techniques, and principles to the planning, funding, operations and valuation
of an entrepreneurial venture
Development stage - ANSWER: period involving the progression from an idea to a
promisng business opportunity
startup stage - ANSWER: period when the venture is organized, developed, and an
initial revenue model is put in place
survival stage - ANSWER: period when revenues start to grow and help pay some,
but typically not all, of the expenses
rapid growth stage - ANSWER: period of very rapid revenue and cash flow growth
maturity stage - ANSWER: period when the growth of revenue and cash flow
continue but at a much slower rate than in the rapid-growth stage
Seed Financing: during development stage - ANSWER: -funds needed to determine
whether the idea can be converted into a viable business opportunity
-primary source of funds at the development stage are the entrepreneurs own assets
-family and friends
Start- up financing: - ANSWER: funds neede to take the venture from having
established a viable business opportunity to initial production and sales
-directed at firms that have a solid managment team, business plan and are
generating revenues
Venture Capital: - ANSWER: early stage financial capital often involving risk of total
loss
Venture Capitalists: - ANSWER: individuals who join in formal, organized firms to
raise and distribute venture capital to new and fast growing ventures
Business Angels: - ANSWER: wealthy individuals operating as formal or private
investors who provide venture financing for small business
Ex: Ron of Jerry
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller kushboopatel6867. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
82871 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now