Question 1

Investors love it when they hear entrepreneur's say that &#34;they have no competition&#34;.

Accepted Answer

Investors typically view the claim of having "no competition" as a red flag, as it may indicate a lack of market validation or understanding.

Question 2

It is important to overestimate when creating financial models, especially during the initial phases of their startup.

Accepted Answer

Overestimating in financial models can lead to unrealistic expectations and poor decision-making. It's important to base models on accurate and realistic assumptions to ensure sound financial planning and strategy.

Question 3

A company can calculate its CLV by taking the total number revenue divided by the total number of customers.

Accepted Answer

CLV (Customer Lifetime Value) is calculated by estimating the total revenue a customer will generate during their lifetime with the company, not just by dividing total revenue by the number of customers.

Question 4

Cost of client acquisition refers to all of the incurred costs associated in a single customer purchasing a company's product and/or service.

Accepted Answer

The cost of client acquisition includes all expenses related to acquiring a new customer, such as marketing, sales, and any other costs directly tied to the process of converting a prospect into a paying customer.

Question 5

Many technology and online driven new companies are very scalable because of their lower cost of goods sold.

Accepted Answer

Technology and online companies often have lower marginal costs for serving additional customers, allowing them to scale more easily compared to traditional businesses with higher costs of goods sold.

Question 6

Financial statements are based on reasonable assumptions and represent predictions of a company's performance; whereas financial models are hard numbers based on the company's past performance.

Accepted Answer

Financial statements are historical records of a company's financial performance, while financial models use assumptions to predict future performance based on past data.

Question 7

What is type of competition are present in industry?&#10;A) Pure Competition&#10;B) Imperfect Competition&#10;C) Oligopoly&#10;D) Monopoly&#10;E) All of the above

Accepted Answer

The answer of What is type of competition are present...

Question 8

What questions are financial models and statements NOT able to answer?&#10;A) Is there enough business acumen in the management team to move forward?&#10;B) Is the business sustainable?&#10;C) Is the business culture suitable for growth?&#10;D) Is the business scalable?&#10;E) What is the variability of the business?

Accepted Answer

The answer of What questions are financial models and statements...

Question 9

Which of the following is NOT a type of revenue model?&#10;A) Recurring revenue&#10;B) Technology revenue&#10;C) Transactional revenue&#10;D) Project revenue&#10;E) Services revenue

Accepted Answer

Technology revenue is not a standard classification of revenue models; it is more of a sector or industry rather than a revenue model type.

Deck 9: Building Your Pro-Forma Financial Statements