Deck 18: The Harvest and Beyond

Question 1

Which of the following harvest options is most likely to produce the most cash for a founder at the time of sale?

A) IPO
B) MBO
C) Outright sale
D) Strategic alliance

Answer 1

C

Question 2

Management buyouts (MBOs)typically require the seller to take a limited amount of cash up front and a note for the balance of the purchase price over several years.

Answer 2

True

Question 3

If begun early in the venture-building process,shaping a harvest strategy is a straightforward task.

Answer 3

False

Question 4

Ignoring outside advice is one of the guidelines in shaping a harvest strategy.

Question 5

Having a harvest goal and crafting a strategy to achieve it are what separate successful entrepreneurs from the rest of the pack.

Question 6

Which of the following is an advantage of being a public company?

A) Focus on short-term profits and performance results
B) Access to long-term capital
C) Guaranteed operating confidentiality
D) Unsusceptibility to the risk of insider trading

Question 7

For many would-be entrepreneurs,_____ is the most attractive harvest option of all in terms of value.

A) merger
B) acquisition
C) public offering
D) strategic alliance

Question 8

Successful entrepreneurs create _____ that results in capital gain.

Question 9

Managing a business that is oriented to harvest is less stressful than managing a business that is not.

Question 10

The workload demanded by a harvest-oriented venture versus one in a venture that cannot achieve a harvest is typically:

A) far more,thus justifying the time and energy.
B) no greater than building a venture without harvest prospects.
C) far less because of a larger management team.
D) about equal,but the stress levels are higher.

Question 11

If impatience is the enemy of an attractive harvest,then fear is its executioner.

Question 12

When entrepreneurs sell their venture in a stock-for-stock exchange,the agreement typically includes protections against a sudden drop in the share price of the acquiring company.

Question 13

Harvesting at the right time,willingly,involves hitting one of the many _____ that entrepreneurs face.

Question 14

What is the most vital aspect of crafting a harvest strategy?

A) Capital
B) Timing
C) The offering
D) Skills

Question 15

A harvest strategy is more sensible if it allows for a time frame of 3 to 10 years.

Question 16

Which harvest option can force a leadership team to focus on short-term profits and performance results?

A) Management buyout (MBO)
B) Employee Stock Ownership Plan (ESOP)
C) Initial Public Offering (IPO)
D) Strategic Alliance

Question 17

A public offering increases public awareness of the company and contributes to the marketability of the products.

Question 18

A _____ is to the entrepreneur what a cash cow is to a large corporation.

Question 19

Most successful entrepreneurs fail to recognize the difference between making money and spending money.

Question 20

In a management buyout,which of the following is a problem that the managers buying out the owners and running the company typically face?

A) Lack of capital
B) Lack of expertise
C) Issues with the legal structure
D) Issues with employee retention

Question 21

A _____ is one in which a founder can realize a gain from a business by selling it to existing partners or to other key managers in the business.

Question 22

_____ are harvest vehicles through which founders can realize some liquidity from their stock by sales to the plan and other employees.

Question 23

What are the advantages of being a public company?

Question 24

"If impatience is the enemy of an attractive harvest,then greed is its executioner." What is being implied by this statement?

Question 25

_____ markets provide access to long-term capital while also meeting subsequent capital needs.

Question 26

What is a critical issue associated with stock-for-stock exchange?

Question 27

What are the three anchors of entrepreneurial process that loom above the rest?

Question 28

What are the three core aspects of shaping a harvest strategy?

Question 29

In a _____,founders can attract capital,often in substantial amounts,from a large company interested in their technologies.

Question 30

Identify four avenues by which a company can realize a harvest from the value it has created.

Question 31

What are some of the disadvantages of being a public company?

Question 32

Discuss why it is important to have a harvest goal in place from the beginning of a venture.