Deck 11: Resource Requirements

Question 1

One advantage of owning resources during the start-up is that it puts the team in a better position to commit and decommit quickly.

Answer 1

False

Question 2

Entrepreneurs in high-potential start-ups should secure resources enough for the task at hand plus a cushion against adversity.

Answer 2

False

Question 3

Effective entrepreneurs set aside time for purely random activities-things done with no specific problem in mind.

Answer 3

True

Question 4

Directors of a company can be held personally liable for its actions and those of its officers.

Question 5

A board of advisors is an especially good alternative to a board of directors because they are authorized to make legal decisions.

Question 6

A entrepreneur is legally bound by the decisions of a formal board of directors.

Question 7

Whenever possible,effective entrepreneurs seek to control rather than own the resources they need.

Question 8

Directors are expected to pay for their own expenses that they incur in preparing for and attending meetings.

Question 9

Consultants should not be employed by start-ups to compensate for a lower level of professional experience in the team.

Question 10

When deciding on a bank or lender,it is better for entrepreneurs to choose an excellent financial institution with just an OK banker or lender than an OK financial institution with an excellent banker or lender.

Question 11

The best place to start in selecting an attorney is with acquaintances of the lead entrepreneur,of members of the management team,or the directors.

Question 12

In choosing a board of directors,entrepreneurs tend to value financial expertise over operating experience.

Question 13

As is the case with legal and accounting professionals,the fees that consultants charge correlate closely with the quality of their services.

Question 14

During the chaotic start-up phase of a venture,entrepreneurs should outsource the legal aspects of decisions and agreements to an expert attorney.

Question 15

When seeking out advisors and specialists,entrepreneurs should involve them at an early stage,and be skeptical of their credentials and advice.

Question 16

Network density relates to the efficiency and cohesiveness of an entrepreneur's bank of contacts and advisors.

Question 17

Competent law firms rarely agree to defer charges or initially provide services at a lower than normal rate as a means of attracting new clients.

Question 18

A board of advisors is not exposed to personal liability stemming from decisions made at the company.

Question 19

Extending accounts receivable is one of the primary sources of working capital for many start-ups and growing firms.

Question 20

Courts have held that even if a director can prove that he or she acted in good faith,that director can still be held personally responsible for the actions of officers.

Question 21

Other people's resources do not include which of the following?

A) Advice from friends or relatives
B) Government-funded management assistance programs
C) Free books and pamphlets
D) Material loaned or provided inexpensively or free by customers

Question 22

One price of resource ownership is an inherent ________.

Question 23

Which of the following legal issues should be of least concern to an entrepreneur building a high-growth venture?

A) Employee plans
B) Federal and state regulations
C) Merger and acquisitions
D) Tax planning and review

Question 24

If a new venture is organized as a corporation,it must have a board of directors elected by ________.

Question 25

People who could be potential board members are increasingly cautious about getting involved for all the following reasons except:

A) Liability
B) Compensation
C) Time
D) Risk

Question 26

What is the main reason for building a brain trust for a new venture?

Question 27

How can new venture entrepreneurs without law degrees save money on legal work?

Question 28

How can lack of money,employees,equipment and such actually work to the advantage of the start-up entrepreneur?

Question 29

Building a company by minimizing resources is referred to in colloquial terms as ________.

Question 30

Describe some ways of using other people's resources.

Question 31

If an entrepreneur of a high-potential firm will be seeking venture capital,she should give first consideration to which of the following solutions for accounting expertise?

A) A smaller,local firm
B) A regional firm
C) A major firm
D) She needs to hire a full-time accountant

Question 32

What is the best referral system for locating consultants?

Question 33

A financing strategy will probably encompass a combination of both ________ and ________ capital.

Question 34

Effective entrepreneurs are more like than others to systematically do what?

Question 35

Staged capital commitments reduce:

A) Equity dilution
B) Financial exposure
C) Risk
D) All of the above

Question 36

Effective entrepreneurs are more likely than others to undertake actions toward increasing their network density and ________.

Question 37

Which of the following is not recommended as part of a productive board of directors?

A) A compensation committee
B) An audit committee
C) An executive committee
D) All are recommended

Question 38

Discuss some of the positive aspects of using advisors rather than a formal board of directors.

Question 39

Why are members of a board of advisors not exposed to personal liability like formal board directors are?