Question 1

"Paralysis by analysis" is part of the principle of affordable loss.

Accepted Answer

The answer of "Paralysis by analysis" is part of the...

Question 2

Funding through venture capital is an excellent way to raise money without the high returns on investment that bankers expect.

Accepted Answer

Venture capitalists typically seek high returns on investment to compensate for the high risk associated with investing in startups and early-stage companies.

Question 3

A venture capitalist is someone who provides equity (ownership) financing for start-up and young, rapidly-growing enterprises.

Accepted Answer

Venture capitalists invest in start-up and young companies in exchange for equity, or partial ownership, with the expectation of high returns if the companies grow successfully.

Question 4

Karen Borski is starting her own business. At present, she is working to calculate a month-by-month projection of expected expenses for the first three years of the company. In other words, Borski is developing a balance sheet.

Accepted Answer

Borski is developing a cash flow forecast or projection, not a balance sheet. A balance sheet provides a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and equity, whereas a cash flow forecast projects future cash inflows and outflows over a period.

Question 5

Generally, venture capitalists expect their investments to reap returns of 25 to 35 percent annually.

Accepted Answer

Venture capitalists typically seek high returns on their investments, often aiming for 25 to 35 percent annually, to compensate for the high risk associated with investing in startups and early-stage companies.

Question 6

An "angel" is a group of individuals who invest directly in firms and receives an equity stake in return.

Accepted Answer

An "angel" typically refers to an individual investor, not a group, who provides capital to startups in exchange for equity.

Question 7

A business "angel" may make less stringent demands than a venture capitalist on the actions of an entrepreneur.

Accepted Answer

Business angels are typically individual investors who may offer more flexible terms and make less stringent demands on the entrepreneur compared to venture capitalists, who often invest larger sums of money and may seek more control over company decisions.

Question 8

Small businesses create over 50% of total American export sales.

Accepted Answer

Small businesses contribute significantly to the U.S. economy, but the majority of American export sales are generated by large corporations.

Question 9

Over the past 20 years, the number of small firms engaging in exporting has more than tripled.

Accepted Answer

Advancements in technology, reductions in trade barriers, and the globalization of markets have made it easier for small firms to engage in international trade, leading to a significant increase in the number of small firms that export.

Question 10

When Henry Estate Winery expanded into China, they faced some challenges related to the lack of knowledge about red wine in China.

Accepted Answer

Henry Estate Winery, like many Western wine producers, likely faced challenges in China due to the country's historically limited exposure to and understanding of Western-style red wines, which can affect market penetration and consumer acceptance.

Question 11

The Henry Estate Winery abandoned their Chinese connections, and began selling their wines to small retail stores.

Accepted Answer

The Henry Estate Winery has not publicly announced abandoning their Chinese connections to begin selling their wines exclusively to small retail stores. Wineries often explore various markets and distribution channels, including international markets and local or small retail stores, without necessarily abandoning existing connections.

Question 12

All family-owned businesses have a certain level of conflict that arises from their unique structure.

Accepted Answer

The answer of All family-owned businesses have a certain level...

Question 13

For most family businesses to succeed in the long run, they must decide who is responsible for what and who has authority.

Accepted Answer

Clear roles and responsibilities, along with defined authority, are crucial for the smooth operation and long-term success of family businesses, helping to prevent conflicts and ensure efficient decision-making.

Question 14

If a family member does something on the job that makes another angry, correcting the problem requires that it be brought into the open quickly.

Accepted Answer

Addressing issues promptly can prevent misunderstandings from escalating and allows for quicker resolution and healing within the workplace.

Question 15

The effective use of a board of directors can assist a family business by providing unbiased and unflinching advice.

Accepted Answer

A board of directors, especially when it includes independent, non-family members, can offer objective, experienced perspectives that might not be influenced by family dynamics, thus providing valuable, unbiased advice to help guide the business.

Question 16

Corporate entrepreneurship is optional for the long-term survival of any established firm.

Accepted Answer

Corporate entrepreneurship, which involves innovation, strategic renewal, and venturing, is often essential for the long-term survival of established firms in rapidly changing markets and industries, as it helps them adapt, innovate, and stay competitive.

Question 17

A corporate entrepreneur is someone in an organization who champions turning new ideas into profitable realities.

Accepted Answer

A corporate entrepreneur, also known as an intrapreneur, is an individual within an organization who takes initiative, often leading projects or innovations that transform ideas into profitable ventures, thereby contributing to the organization's growth and evolution.

Question 18

Lou Dobbs, creator of CNNFN, is an example of a corporate entrepreneur.

Accepted Answer

Lou Dobbs, by creating CNNFN (CNN Financial News), demonstrated corporate entrepreneurship by innovating within an existing company, CNN, to expand its offerings and enter new markets.

Question 19

"Corporate Entrepreneurship" is a contradiction in terms. Entrepreneurship is seldom if ever promoted in corporations because of its potential damage to the organizational structure.

Accepted Answer

Corporate Entrepreneurship, also known as Intrapreneurship, is encouraged in many corporations to promote innovation, flexibility, and competitive advantage, allowing these organizations to explore new markets, technologies, and strategies within their existing structures.

Question 20

Organizations that redirect themselves through innovation are fostering entrepreneurial activity.

Accepted Answer

Organizations that engage in innovation often do so by exploring new ideas, products, or markets, which is a core aspect of entrepreneurial activity. This process of innovation helps them adapt, grow, and maintain competitiveness.

Quiz 6: Fostering Entrepreneurship