Question 1

When raising venture capital,which of the following is a guideline to be followed?

Accepted Answer

B

Question 2

If a group of individuals are starting a venture that will not need startup capital,then it is appropriate to hold off on the business plan while they establish a base for sales.

Accepted Answer

Even if a venture does not require startup capital, a business plan is crucial for defining goals, strategies, market analysis, and planning for future growth and challenges.

Question 3

Developing a business plan sets the mood for internal relationships and negotiations.

Accepted Answer

Developing a business plan requires communication and collaboration within a company, which can set the tone for how relationships and negotiations are approached.

Question 4

A business plan carefully articulates the market,business model,investment requirements,and returns from an opportunity but does not include the risks involved.

Accepted Answer

A business plan typically includes a section on risk analysis and mitigation strategies. Identifying and addressing potential risks is an essential part of creating a comprehensive business plan.

Question 5

Identify a characteristic of a business plan.

Accepted Answer

A characteristic of a business plan is that it is a work in progress, meaning that it can and should be continuously updated and revised as the business evolves and new information becomes available. It is not a one-shot process or an end in itself, and while there may be certain standard elements that are included in most business plans, the specifics of what needs to be included will vary depending on the industry, the audience, and the goals of the business. Therefore, it is not a rigid process that is the same across all industries.

Question 6

A business plan is:

Accepted Answer

A business plan often serves as the initial point of engagement with potential investors, outlining the business's goals, strategies, and financial projections to attract investment.

Question 7

It is best to hire outsiders to prepare a business plan.

Accepted Answer

While outsiders can provide valuable insights and expertise, the core team of the business often has the best understanding of the company's vision, goals, and capabilities, making them well-suited to prepare the business plan.

Question 8

In a business plan,the business concept should be described vaguely in the executive summary to attract more venture capitalists.

Accepted Answer

The business concept should be clearly and concisely described in the executive summary to effectively communicate the vision and opportunity to potential investors. Being too vague can lead to confusion and lack of interest.

Question 9

When speaking with venture capitalists,the entrepreneurial team should be prepared to provide the complete details of ongoing talks with other venture capitalists.

Accepted Answer

Venture capitalists understand that entrepreneurs may be in talks with multiple investors to secure the best deal, and it's a common practice to keep specific details of these discussions confidential until a certain level of interest or commitment is established. Sharing complete details of ongoing talks with other venture capitalists could compromise negotiating positions or breach confidentiality agreements.

Question 10

Which of the following is true about writing a business plan?

Accepted Answer

Hiring an outside professional to write a business plan can bring in expertise and an objective perspective, but it's crucial for the entrepreneur to be deeply involved in the process to ensure the plan reflects the true nature of the business and its goals. Outsourcing the writing without proper involvement can lead to a disconnect between the business's core objectives and how they are presented.

Question 11

Creating a business plan:

Accepted Answer

Creating a business plan is a great way to analyze an opportunity, assess its feasibility, and identify potential challenges and risks. It helps the entrepreneur to evaluate the market, target audience, competition, marketing strategy, financial projections, and other critical factors that impact the success of the venture. It is an iterative process that requires continuous refinement and adaptation based on feedback and new information. It is not a one-shot process or relevant only for external funding purposes.

Question 12

Alex,the founder of a new venture,is in the process of developing a business plan.He develops an overall plan for the project with details of draft deadlines.What is the next step he is likely to take?

Accepted Answer

After developing an overall plan with draft deadlines, the next logical step is to create a more specific list of tasks to ensure that each aspect of the plan is addressed and completed on time.

Question 13

When presenting a business plan,one must never say "no" to an offer price from a venture capitalist.

Accepted Answer

The answer of When presenting a business plan,one must never...

Question 14

Business plans are seldom obsolete and last throughout the lifecycle of a project.

Accepted Answer

Business plans should be living documents that evolve as the project progresses and new information is obtained. As such, they may become obsolete and need to be updated or completely revised to reflect changes in the market, industry, or company. Therefore, it is not accurate to say that they last throughout the entire lifecycle of a project without any changes.

Question 15

There is not much difference between developing a business plan and screening an opportunity.

Accepted Answer

Developing a business plan involves creating a detailed roadmap that outlines the goals, strategies, and financial projections of a new or existing business. Screening an opportunity involves assessing the viability and potential of a business idea before investing time and resources into developing a full business plan. While the two activities are related, they serve different purposes and involve different levels of analysis and detail.

Question 16

Which of the following is the first step in writing an action plan?

Accepted Answer

The first step in writing an action plan is to segment the information. This means breaking down the larger goal into smaller, more specific tasks or objectives. By doing this, it becomes easier to create an overall schedule and action calendar, and to identify any necessary resources or potential roadblocks. Meeting with venture capitalists is not typically part of the initial step of creating an action plan.

Question 17

The economics of a business model in a business plan doesn't matter,but the numbers matter enormously.

Accepted Answer

The economics of a business model are crucial as they provide insight into the viability, sustainability, and profitability of the business, while the numbers or financial projections validate these aspects by quantifying potential success.

Question 18

The business plan is more of an end in itself than a work in progress.

Accepted Answer

The business plan is not just an end in itself but also a work in progress. It should be constantly reviewed and revised to reflect changes in the business environment and the company's goals and objectives.

Question 19

Getting a "no" from venture capitalists is easy,whereas getting a "yes" from venture capitalists is very hard.

Accepted Answer

The answer of Getting a "no" from venture capitalists is...

Question 20

Preparing and presenting a business plan to prospective investors is one of the best ways for a team to learn about the venture strategy.

Accepted Answer

Preparing and presenting a business plan allows the team to thoroughly understand their venture strategy, identify key challenges and opportunities, and articulate clear goals and objectives. In addition, presenting the plan to prospective investors allows the team to receive valuable feedback and potentially secure funding to bring their vision to life.

Quiz 7: The Business Plan