Question 1

Dr.Walter Good at the Asper School of Business at the University of Manitoba believes that serial entrepreneurs are visionaries.

Accepted Answer

Dr. Walter Good of the Asper School of Business at the University of Manitoba believes that serial entrepreneurs are visionaries.

Question 2

Small business owners who want to retire or slow down must sell the business.

Accepted Answer

Small business owners have several options besides selling, such as passing the business to a family member, hiring a manager to run the business, or restructuring the business to require less of their involvement.

Question 3

Many entrepreneurs consider an initial public offering to be the "holy grail" of their career,even though most do not really understand the process.

Accepted Answer

Many entrepreneurs aspire to take their companies public through an initial public offering (IPO), but many of them do not fully understand the complexities of the process.

Question 4

Within the subject of financial acquisitions,MBO refers to management by objectives.

Accepted Answer

MBO actually refers to management buyout, which is a type of financial acquisition where the current management of a company purchases a controlling interest in the company from its existing owners, often with the help of private equity firms or other financial institutions. Management by objectives (MBO) is a management philosophy and process for defining and tracking goals and objectives within an organization.

Question 5

For an entrepreneur,exiting a business that has been an integral part of life for some time can be a very emotional experience.

Accepted Answer

Entrepreneurs often become emotionally attached to their businesses, which can make the process of exiting more difficult.

Question 6

Entrepreneurs should think very carefully about their motives for exiting a business and what they plan to do after the harvest.

Accepted Answer

Exiting a business and the post-harvest plans can have a significant impact on an entrepreneur's personal and professional life. Therefore, careful consideration of motives and future plans is essential.

Question 7

Most entrepreneurs do not understand the initial public offering (IPO)process.

Accepted Answer

IPO process involves complex legal and financial procedures that may be unfamiliar to most entrepreneurs.

Question 8

Financial acquisition of a firm is a purchase in which the value of the business is based on the stand-alone cash-generating potential of the firm being acquired.

Accepted Answer

In a financial acquisition, the value of the business is based on its cash-generating potential and other financial factors, rather than its strategic value or potential synergies with the acquiring company.

Question 9

As in any exit strategy,the sale of a firm is solely about determining the value of a company.

Accepted Answer

The sale of a firm involves not only determining its value but also considering the timing of the sale, the market conditions, potential buyers, and the strategic reasons behind the sale, among other factors.

Question 10

According to the study Managing for Growth; Enabling Sustainable Success in Canadian SMEs by the Queen's School of Business,managers of Canadian SMEs that have the capacity for profitable growth but fail to achieve commercial success often lack the necessary organizational and leadership skills to respond to business challenges.

Accepted Answer

The statement accurately reflects the findings of the study by the Queen's School of Business.

Question 11

Harvesting is the method entrepreneurs and investors use to grow their firms.

Accepted Answer

Harvesting is the process entrepreneurs and investors use to exit a business, thereby realizing their investment's value, not to grow their firms.

Question 12

Universities are focused on large corporations and provide few,if any,services a small business could use.

Accepted Answer

Universities often offer a variety of services and resources that can be beneficial to small businesses, including business development programs, research collaborations, internships, and consulting projects.

Question 13

Free cash flow refers to operating profits plus depreciation less cash taxes and less the investments required to grow the firm.

Accepted Answer

Free cash flow is calculated by subtracting capital expenditures from operating cash flow, not operating profits. It is also often calculated as net income plus depreciation and amortization less capital expenditures and changes in net working capital.

Question 14

According to the study Managing for Growth; Enabling Sustainable Success in Canadian SMEs by the Queen's School of Business,turnover of key personnel during transition from one growth stage to another is a sign of management problems.

Accepted Answer

The answer of According to the study Managing for Growth;...

Question 15

A survey of business owners discovered that more than half of them felt a sense of loneliness.

Accepted Answer

According to the statement, more than half of business owners felt a sense of loneliness, indicating that the statement is true.

Question 16

An entrepreneur will frequently feel a sense of loss after harvesting the business.

Accepted Answer

Harvesting a business involves selling or exiting the business, which can be an emotional process for entrepreneurs who have invested a significant amount of time, effort, and passion into building the business. As a result, it is not uncommon for entrepreneurs to feel a sense of loss after harvesting their business.

Question 17

While many founders will retain ownership after they "retire," many others will "harvest" the business profits to secure a sound financial retirement.

Accepted Answer

This statement is true. Some founders will choose to continue owning the business after retirement, while others may choose to sell or harvest the profits to support their retirement.

Question 18

Serial entrepreneurs have great difficulty focusing.

Accepted Answer

Serial entrepreneurs are typically highly focused individuals who are able to channel their energies and attention into multiple ventures over time, often with success. They are adept at managing and dividing their focus among various projects.

Question 19

One conclusion of the study Managing for Growth; Enabling Sustainable Success in Canadian SMEs,by the Queen's School of Business,is the importance for management to open communication lines with all levels of staff to promote discussion about the evolution and growth of the company.

Accepted Answer

This is stated as one conclusion of the study in the sentence provided.

Question 20

One of the reasons for going public to raise equity capital is to create a liquid market for the company's stock.

Accepted Answer

Going public and listing on a stock exchange creates a market for the company's shares, allowing investors to buy and sell them easily, thereby creating liquidity.

Quiz 15: Managing Growing Firms and Exit Strategies