Question 1

SuLin is setting up a small construction shop and uses his personal credit card to purchase the company's basic equipment.This process is referred to as which of the following?
A)venture capital
B)sweat equity
C)external funding
D)bootstrapping

Accepted Answer

Using personal funds, such as a credit card, to start a business is known as bootstrapping. This is a common strategy used by entrepreneurs who are just starting out and may not have access to external funding or venture capital. Sweat equity refers to the effort put in by an individual to build up a business, while external funding and venture capital both involve obtaining financial resources from outside sources.

Question 2

Wikipedia encouraging its users to edit and update its free online encyclopedia is an example of ______.
A)patronage
B)equity
C)crowdfunding
D)crowdsourcing

Accepted Answer

Wikipedia's use of its users to contribute and update its content is an example of crowdsourcing, which is the practice of obtaining services, ideas, or content by soliciting contributions from a large group of people, especially from the online community.

Question 3

Wikihouse freely provides user-submitted blueprints for anyone who wishes to build an affordable custom-built house with 3D printing.This is an example of ______ because ______.
A)crowdsourcing; it uses the expertise of the crowd to greatly reduce the cost of design and construction
B)crowdfunding; it uses the Internet to quickly generate a large user base for Wikihouse
C)bootstrapping; it allows amateur designers an opportunity to disrupt the construction business
D)Wikifunding; it uses the open-source Wikipedia platform to generate new solutions and opportunities

Accepted Answer

Wikihouse is an example of crowdsourcing because it utilizes the collective knowledge and expertise of its users to provide affordable housing solutions. The blueprints are user-submitted and freely available for anyone to use, reducing the cost of design and construction.

Question 4

What are "the 3 Fs" for financial assistance?
A)the three major sources of formal funding
B)a slang term meaning angel investors
C)family,friends,and fools
D)free financial funding

Accepted Answer

"The 3 Fs" refer to family, friends, and fools as sources of informal funding for a business venture. It is not a formal source of funding and often involves personal relationships. It is not referring to any specific financial assistance programs or funding options.

Question 5

Which of the following is an advantage of bootstrapping?
A)You can expand your business faster.
B)You will avoid risk.
C)Outside investors are more likely to fund you if you have bootstrapped.
D)You have tapped into a lucrative source of advice and connections.

Accepted Answer

Bootstrapping shows that you have skin in the game and have managed to grow your business with limited resources, which can make your business more attractive to outside investors. They may see it as a sign of commitment, resourcefulness, and the potential for sustainable growth, making them more likely to invest.

Question 6

Seth starts his company with computers that he found on craigslist.com and some office furniture from the basement of his parents' home.This strategy would be considered which of the following?
A)startup
B)sweat equity
C)penny pinching
D)zero-based funding

Accepted Answer

This strategy would be considered penny pinching as Seth is using limited resources and finding ways to save money wherever he can.

Question 7

The process of raising capital for a new venture from a large audience,usually through the Internet,is called ______.
A)crowdfunding
B)penny pinching
C)crowdsourcing
D)bootstrapping

Accepted Answer

The process of raising capital for a new venture from a large audience, usually through the Internet, is called crowdfunding.

Question 8

Crowdfunding and crowdsourcing would both be considered which of the following strategies?
A)formal fundraising
B)bootstrapping
C)angel investing
D)penny pinching

Accepted Answer

Crowdfunding and crowdsourcing are both considered bootstrapping strategies. Bootstrapping refers to funding a project or venture without significant external investment, using personal finances or the revenue from the business itself. Crowdfunding involves raising small amounts of money from a large number of people, typically via the internet, while crowdsourcing involves obtaining services, ideas, or content by soliciting contributions from a large group of people, especially from an online community, rather than from traditional employees or suppliers. Both methods allow entrepreneurs to gather resources without relying on formal investment channels or significant capital outlay, embodying the essence of bootstrapping.

Question 9

Crowdsourcing is a bootstrapping method that saves money while obtaining valuable ______ resources.
A)information
B)financial
C)technological
D)social media

Accepted Answer

Crowdsourcing involves obtaining information, ideas, or opinions from a large group of people, which can be a cost-effective way to gather resources as compared to hiring a team internally to generate the same level of output. Financial resources and technological resources may still be required to implement the crowdsourcing project, depending on its nature. Social media can be one of the channels used in crowdsourcing, but it is not a resource in itself.

Question 10

Crowdfunding is a resource for ______.
A)talent
B)intellectual property
C)money
D)labor

Accepted Answer

Crowdfunding is primarily a resource for raising money. While talent, intellectual property, and labor may be utilized in a crowdfunding campaign, they are not the primary focus.

Question 11

Crowdsourcing is a resource for ______.
A)money
B)investors
C)physical capital
D)labor and talent

Accepted Answer

Crowdsourcing is a way of obtaining labor and talent from a large group of people, typically through an online platform. It allows businesses and organizations to tap into a diverse range of skills, expertise, and ideas from a global pool of individuals. While some crowdsourcing initiatives may involve raising money or attracting investors, the primary resource that crowdsourcing offers is labor and talent.

Question 12

In reference to crowdfunding,a backer is best described as ______.
A)a person who will pay back a loan if you fail to do so
B)a person who contributes support in a crowdfunding venture
C)a financial institution that lends money to a startup
D)the financial institution that manages the transfer of money

Accepted Answer

A backer is someone who contributes support (usually financial) to a crowdfunding campaign or venture. They are not necessarily responsible for paying back a loan or managing the transfer of money, like a financial institution would be.

Question 13

What is the name given to the process of building a business with very little,or no,funding?
A)seed startup
B)bootstrapping
C)zero funding
D)skeleton funding

Accepted Answer

Bootstrapping refers to the process of building a business with very little or no external funding, relying instead on personal funds, revenues generated by the business, and creative cost-cutting measures. It involves maximizing available resources and prioritizing spending to achieve sustainable growth.

Question 14

Jose is opening a small restaurant.On weekends,he works with his cousin to construct the tables,chairs,and counters that will go into the restaurant.What is the name given to the result of these efforts?
A)labor equity
B)owner labor
C)sweat equity
D)family ownership

Accepted Answer

The term "sweat equity" refers to the effort and labor put into a business by its owners, particularly during the early stages. In this case, Jose and his cousin are putting in their own physical labor to build the restaurant's furniture and fixtures, which would fall under the category of sweat equity.

Question 15

When someone states,"I don't have money to start a business," what fact might you tell them to consider?
A)Most businesses start without any formal investment.
B)This is a valid reason for not starting a business.
C)Formal investment will be needed to make a successful company.
D)People who have no money cannot start a business.

Accepted Answer

Many successful businesses start with very little or no formal investment, often starting small and gradually growing as they earn profits. It is possible to begin with just a few resources and a lot of hard work and dedication.

Question 16

A company launching 100% through bootstrapping would use what source of funding?
A)angel investor
B)venture capital funds
C)personal funds
D)a bank loan

Accepted Answer

When a company launches through bootstrapping, it means that they are using their own resources and funds to start and grow the business. Personal funds, such as savings, a personal line of credit, or utilizing assets like a home equity line of credit, are the most common sources of funding for bootstrapped companies. Angel investors and venture capital funds typically invest in companies that have already demonstrated some degree of success and potential for growth, which is not the case for a company launching 100% through bootstrapping. A bank loan may be an option for some bootstrapped companies, but it could also be difficult to secure without a proven track record or collateral.

Question 17

People sharing their medical information online so as to help in the development of pharmaceuticals and medical devices that can be used to improve medical treatment is an example of ______.
A)networking
B)crowdfunding
C)crowdsourcing
D)angel investing

Accepted Answer

Crowdsourcing involves soliciting information or input from a large group of people, typically done through online platforms. In this case, people are sharing their medical information online to contribute to the development of new medical treatments, making it an example of crowdsourcing. Networking refers to building relationships and connections with people, often for professional purposes. Crowdfunding involves raising money from a large group of people for a specific project or cause. Angel investing refers to investing in startups or early-stage companies as an individual investor.

Question 18

Using whatever resources you have to save money while you are getting your business started is referred to as what type of strategy?
A)seed money
B)guerilla startup
C)penny pinching
D)skeletal startup

Accepted Answer

The answer of Using whatever resources you have to save...

Question 19

Using the Internet to attract,aggregate,and manage ostensibly inexpensive or even free labor from enthusiastic customers and like-minded people is called ______.
A)crowdfunding
B)penny pinching
C)crowdsourcing
D)bootstrapping

Accepted Answer

Crowdsourcing is the process of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, especially from the online community. It involves using the internet to attract, aggregate, and manage inexpensive or free labor from volunteers, customers, or like-minded individuals. Crowdfunding is a different concept, which involves raising funds from a large number of people online to support a project or venture. Penny pinching and bootstrapping are also different approaches to managing costs in a business.

Question 20

Hard work an entrepreneur personally puts in to get a business up and running is known as ______.
A)penny pinching
B)bootstrapping
C)sweat equity
D)affordable loss

Accepted Answer

Sweat equity refers to the non-monetary investment that entrepreneurs or founders of a company put into their venture, which includes hard work, effort, and time to get the business started and running.

Quiz 12: Bootstrapping and Crowdfunding for Resources

SuLin is setting up a small construction shop and uses his personal credit card to purchase the company's basic equipment.This process is referred to as which of the following?

Wikipedia encouraging its users to edit and update its free online encyclopedia is an example of ______.

Wikihouse freely provides user-submitted blueprints for anyone who wishes to build an affordable custom-built house with 3D printing.This is an example of because .

What are "the 3 Fs" for financial assistance?

Which of the following is an advantage of bootstrapping?

Seth starts his company with computers that he found on craigslist.com and some office furniture from the basement of his parents' home.This strategy would be considered which of the following?

The process of raising capital for a new venture from a large audience,usually through the Internet,is called ______.

Crowdfunding and crowdsourcing would both be considered which of the following strategies?

Crowdsourcing is a bootstrapping method that saves money while obtaining valuable ______ resources.

Crowdfunding is a resource for ______.

Crowdsourcing is a resource for ______.

In reference to crowdfunding,a backer is best described as ______.

What is the name given to the process of building a business with very little,or no,funding?

Jose is opening a small restaurant.On weekends,he works with his cousin to construct the tables,chairs,and counters that will go into the restaurant.What is the name given to the result of these efforts?

When someone states,"I don't have money to start a business," what fact might you tell them to consider?

A company launching 100% through bootstrapping would use what source of funding?

People sharing their medical information online so as to help in the development of pharmaceuticals and medical devices that can be used to improve medical treatment is an example of ______.

Using whatever resources you have to save money while you are getting your business started is referred to as what type of strategy?

Using the Internet to attract,aggregate,and manage ostensibly inexpensive or even free labor from enthusiastic customers and like-minded people is called ______.

Hard work an entrepreneur personally puts in to get a business up and running is known as ______.