Question 1

Which of the following qualities was not identified in the textbook as a preferred attribute of the founder or founders of a firm?
A) prior entrepreneurial experience
B) firm started by a team
C) relevant industry experience
D) prior experience working in a government or university position
E) higher education

Accepted Answer

The textbook did not identify prior experience working in a government or university position as a preferred attribute of the founder or founders of a firm.

Question 2

Which of the following statements is untrue regarding founding teams?
A) The members of heterogeneous teams are diverse in terms of their abilities and experiences.
B) The members of homogenous teams are very similar in terms of their abilities and experiences.
C) Teams that have worked together before have an edge.
D) Studies show that more than one individual starts 50 to 70 percent of all new firms.
E) It is generally believed that new ventures started by an individual have an advantage over new ventures started by a team.

Accepted Answer

This statement is untrue as studies have shown that new ventures started by a team have a higher probability of success compared to new ventures started by an individual.

Question 3

Savanna Combs opened a clothing boutique two years ago. Unfortunately, the boutique failed after 18 months. Savanna attributes the failure of her boutique to the facts that her employees couldn't adjust quickly enough to their new roles and that her boutique lacked a "track record" with outside buyers and sellers, which made it difficult to form partnerships and make sales. Savanna suffered from what research calls the:
A) burden of novelty
B) millstone of innovation
C) liability of newness
D) liability of preparedness
E) burden of newness

Accepted Answer

The liability of newness refers to the challenges and disadvantages that new businesses face, including a lack of track record, limited resources, and difficulty building partnerships. In Savanna's case, her boutique failed because it lacked a track record with outside buyers and sellers, making it difficult to form partnerships and make sales. Additionally, her employees couldn't adjust quickly enough to their new roles, another common challenge for new businesses. Therefore, the best choice is C) liability of newness.

Question 4

Scripped, the company profiled in the opening feature for Chapter 9, offers Web-based screenwriting software. Which of the following statements best reflects Scripped's personnel policy?
A) Scripped has hired aggressively and now has approximately 40 employees.
B) Its three cofounders are its only employees.
C) Scripped was founded by two UCLA MBA students and quickly grew to 10 employees.
D) Its founder is its only employee.
E) It has avoided building a large staff. Its formal employees consist of its three cofounders and an individual obtained in a merger.

Accepted Answer

The passage states that Scripped "has avoided building a large staff" and that its "formal employees consist of its three cofounders and an individual obtained in a merger." Therefore, choice E is the best statement that reflects Scripped's personnel policy.

Question 5

The What Went Wrong feature in Chapter 9 focuses on Deever, a 2008 startup that helped software developers use cloud-based services to "test" their code in an expedient manner. According to the feature, one of the primary reasons Deever failed was:
A) it lacked a cofounder who loved the business side of running a startup
B) the cofounders couldn't get along
C) it didn't build a robust partnership network
D) it didn't solicit advice from attorneys, bankers or business consultants
E) it didn't have a Board of Advisors

Accepted Answer

The answer of The What Went Wrong feature in Chapter...

Question 6

Which of the following statements is not true regarding the attributes of the founder or founders of a firm?
A) Evidence suggests that important entrepreneurial skills are enhanced through higher education.
B) Founders with prior entrepreneurial experience are more likely to avoid costly mistakes.
C) Founders with experience in the same industry as their new ventures will typically have "blinders" on and are typically not as effective as founders new to the industry.
D) Founders with broad social and professional networks have an advantage.
E) New ventures that are started by a team rather than an individual have an advantage.

Accepted Answer

The statement "Founders with experience in the same industry as their new ventures will typically have 'blinders' on and are typically not as effective as founders new to the industry" is not true. In fact, founders with industry experience often have an advantage in starting a new venture because they understand the industry, have established networks, and are more likely to be taken seriously by potential investors and customers.

Question 7

According to the textbook, studies show that more than one individual starts ________ of all new firms.
A) 20 to 25 percent
B) 50 to 70 percent
C) 5 to 15 percent
D) 30 to 40 percent
E) 75 to 90 percent

Accepted Answer

According to the textbook, studies show that more than one individual starts 50 to 70 percent of all new firms.

Question 8

Which of the following was not identified in the textbook as an element of a new venture team?
A) board of advisors
B) suppliers and vendors
C) key employees
D) lenders and investors
E) management team

Accepted Answer

Suppliers and vendors are not typically considered part of the new venture team, which primarily consists of the management team, key employees, board of advisors, and lenders and investors.

Question 9

The high failure rate among new ventures is due in part to the liability of newness, which refers to the fact that new companies often falter because:
A) they are underfunded and the founders of the firms don't move quickly enough to put together boards of directors and boards of advisors that can provide them direction and advice
B) the founders of the firms underestimate the complexities involved with starting a new business and the firms lack a "track record" with outside buyers and sellers
C) the people who start the firms can't adjust quickly enough to their new roles and the firms lack a "track record" with outside buyers and sellers
D) the people who start the firms can't adjust quickly enough to their new roles and they are underfunded
E) the founders of the firms underestimate the complexities involved with starting a new business and they don't move quickly enough to establish business partnerships

Accepted Answer

The answer of The high failure rate among new ventures...

Question 10

Which of the following statements is incorrect regarding founding teams?
A) The members of heterogeneous teams are diverse in terms of their abilities and experiences.
B) Teams that are working together for the first time have an advantage over teams that have worked together before.
C) The psychological support that cofounders of a new business can offer one another is an important element of a firm's success.
D) The members of homogeneous teams are very similar in terms of their abilities and experiences.
E) Studies show that more than one individual starts 50 to 70 percent of all new teams.

Accepted Answer

Teams that have worked together before have the advantage of established communication and trust, while teams working together for the first time may experience challenges and delays in developing these relationships.

Question 11

The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm is called:
A) linking
B) socializing
C) networking
D) associating
E) connecting

Accepted Answer

The process described in the question is commonly known as networking. It involves actively seeking out and establishing relationships with people who share similar interests or who could be beneficial to the firm in some way, such as potential customers or business partners. This process typically involves socializing and building connections with people, but the specific term for this activity is networking.

Question 12

A ________ is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.
A) new venture panel
B) startup team
C) new venture team
D) new project team
E) startup cadre

Accepted Answer

The term "new venture team" specifically describes the group of individuals needed to move a new venture from an idea to a fully functioning firm, which includes founders, key employees, and advisers. "New venture panel" and "new project team" are not commonly used terms in entrepreneurship, while "startup team" and "startup cadre" are more general terms that do not necessarily refer specifically to the group responsible for launching a new venture.

Question 13

The members of heterogeneous teams are:
A) diverse in terms of their abilities and experiences
B) diverse in terms of their abilities, but very similar in terms of their experiences
C) similar in terms of their abilities and experiences
D) diverse in terms of their experiences, but very similar in terms of their abilities
E) sometimes diverse in terms of their abilities and experiences and sometimes similar along the same dimensions

Accepted Answer

Heterogeneous teams are those which are composed of individuals with different abilities, experiences, backgrounds, and personalities. Thus, option A is the best choice since it accurately reflects the definition of heterogeneous teams. The other options either incorrectly suggest that the team members are too similar or fail to capture the key aspect of diversity in the team.

Question 14

A(n) ________ is a chart that depicts the most important skills that are needed in a new venture and where skills gaps exist.
A) expertise report
B) talent profile
C) abilities summary
D) skills profile
E) talent summary

Accepted Answer

A skills profile is a chart that outlines the necessary skills for a new venture and identifies any skill gaps that may exist. This helps the business owner to understand where they may need to hire additional personnel or seek out training opportunities to fill those gaps. The other options (expertise report, talent profile, abilities summary, talent summary) do not specifically address skills gaps and may not be as targeted to the needs of a new venture.

Question 15

The members of homogeneous teams are:
A) diverse in terms of their abilities and experiences
B) diverse in terms of their abilities, but very similar in terms of their experiences
C) similar in terms of their abilities and experiences
D) diverse in terms of their experiences, but very similar in terms of their abilities
E) sometimes diverse in terms of their abilities and experiences and sometimes similar along the same dimensions

Accepted Answer

Homogeneous teams are composed of individuals who have similar abilities and experiences. This can create a sense of unity and cohesion within the team, and can lead to increased productivity and efficiency in completing tasks. However, this kind of team may also be lacking in creativity and innovation, as the members may all think in similar ways.

Question 16

The fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firm lacks a "track record" with outside buyers and sellers, is referred to as the:
A) liability of preparedness
B) liability of newness
C) burden of novelty
D) burden of freshness
E) millstone of innovation

Accepted Answer

The term "liability of newness" refers to the challenges faced by new companies, such as the inexperience of the founders and lack of history or reputation in the market. This can make it difficult to attract customers, investors, and talent, and can lead to organizational struggles as the company grows and changes.

Question 17

Jenny Templeton is preparing to launch a home security firm. The team of people that will launch Jenny's firm are as follows: Jenny (CEO), Brent (VP-Finance), Carrie (VP-Sales), a four-person Board of Directors, a five-person Board of Advisors, and Jenny's primary investor, who will assume an advisory role. The group of people that will launch Jenny's firm is called its:
A) startup squad
B) new venture panel
C) new venture team
D) startup cadre
E) startup troop

Accepted Answer

The group of people that will launch Jenny's firm is called a "new venture team." This term is commonly used to refer to the group of individuals who come together to start a new business venture. The other choices (startup squad, new venture panel, startup cadre, and startup troop) are not commonly used terms to describe this type of team.

Question 18

Ned Kite is a four time business owner. One thing that has served Ned well throughout his entrepreneurial career is his ability to build and maintain relationships with people whose interests are similar or whose relationships could bring advantages to his new ventures. According to the textbook, Ned is a good:
A) networker
B) socializer
C) linker
D) assembler
E) connector

Accepted Answer

The ability to build and maintain relationships with people is a key characteristic of a good networker. Ned's success in his entrepreneurial career can be attributed to his strong networking skills.

Question 19

According to the textbook, prior entrepreneurial experiences:
A) is one of the poorest predictors of future entrepreneurial performance
B) is one of the most consistent predictors of future entrepreneurial performance for entrepreneurs under 50 years of age but not for entrepreneurs over 50 years of age
C) is one of the most consistent predictors of future entrepreneurial performance
D) is one of the most consistent predictors of future entrepreneurial performance in service firms but not in manufacturing firms
E) has no relationship to future entrepreneurial performance

Accepted Answer

According to the textbook, prior entrepreneurial experience is one of the most consistent predictors of future entrepreneurial performance.

Question 20

According to the textbook, which of the following statements is inaccurate regarding the size and composition of the founding team of a firm?
A) There is no relationship between a founding team's size and its effectiveness.
B) A founding team larger than four people is typically too large to be practical.
C) The members of a homogeneous founding team are similar in terms of their abilities and experiences.
D) The members of a heterogeneous founding team are diverse in terms of their abilities and experiences.
E) A founding team can be too big, causing communication problems and increasing potential for conflict.

Accepted Answer

The statement "There is no relationship between a founding team's size and its effectiveness" is inaccurate according to the textbook, as there is research suggesting that larger founding teams may have lower performance due to communication challenges and conflicts.

Quiz 9: Building a New Venture Team

Which of the following qualities was not identified in the textbook as a preferred attribute of the founder or founders of a firm?

Which of the following statements is untrue regarding founding teams?

Scripped, the company profiled in the opening feature for Chapter 9, offers Web-based screenwriting software. Which of the following statements best reflects Scripped's personnel policy?

The What Went Wrong feature in Chapter 9 focuses on Deever, a 2008 startup that helped software developers use cloud-based services to "test" their code in an expedient manner. According to the feature, one of the primary reasons Deever failed was:

Which of the following statements is not true regarding the attributes of the founder or founders of a firm?

According to the textbook, studies show that more than one individual starts ________ of all new firms.

Which of the following was not identified in the textbook as an element of a new venture team?

The high failure rate among new ventures is due in part to the liability of newness, which refers to the fact that new companies often falter because:

Which of the following statements is incorrect regarding founding teams?

The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm is called:

A ________ is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.

The members of heterogeneous teams are:

A(n) ________ is a chart that depicts the most important skills that are needed in a new venture and where skills gaps exist.

The members of homogeneous teams are:

The fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firm lacks a "track record" with outside buyers and sellers, is referred to as the:

According to the textbook, prior entrepreneurial experiences:

According to the textbook, which of the following statements is inaccurate regarding the size and composition of the founding team of a firm?