New Venture Creation Practice Questions
Course Introduction
New Venture Creation is a dynamic course designed to guide students through the process of developing innovative business ideas and launching successful startups. The course covers key aspects of entrepreneurship, including opportunity recognition, market analysis, business model development, resource acquisition, and financial planning. Students will learn how to craft compelling value propositions, develop effective go-to-market strategies, and build scalable business operations. Through case studies, interactive workshops, and the creation of a comprehensive business plan, participants gain practical skills and real-world insights essential for transforming creative concepts into viable new ventures.
Recommended Textbook
New Venture Creation Entrepreneurship for the 21st Century 10th Edition by Stephen Spinelli
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18 Chapters
722 Verified Questions
722 Flashcards
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Chapter 1: The Global Entrepreneurial Revolution for a Flatter World
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35 Verified Questions
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Sample Questions
Q1) Explain the four entrepreneurial transformations that are changing the world.
Answer: Evidence and trends point to at least four entrepreneurial transformations that profoundly impact how the world lives,works,learns,and enjoys leisure.They are as follows:
1.Entrepreneurship is the new management paradigm:Entrepreneurial thinking and reasoning-so common in dynamic,higher-potential,and robust new and emerging firms-are now becoming infused and embedded into the strategies and practices of corporate America.
2.Entrepreneurship has spawned a new education paradigm for learning and teaching. 3.Entrepreneurship is becoming a dominant management model for running nonprofit businesses and in the emerging field of social ventures.
4.Entrepreneurship is rapidly transcending business schools:Engineering,life sciences,architecture,medicine,music,liberal arts,and K-12 are new academic grounds that are exploring and embracing entrepreneurship in their curricula.
Q2) _____ entrepreneurship means new venture creation.
Answer: Classical
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Chapter 2: The Entrepreneurial Mind: Crafting a Personal
Entrepreneurial Strategy
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43 Verified Questions
43 Flashcards
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Sample Questions
Q1) Research has shown that an entrepreneur is more driven by the conservation of resources,whereas a manager is more opportunity-driven.
A)True
B)False
Answer: False
Q2) Although the skills of a manager and an entrepreneur overlap in the area of solid management skills,a manager is more driven by the conservation of resources,while the entrepreneur is more ___.
Answer: opportunity-driven
Q3) Entrepreneurs are their own bosses and completely independent.
A)True
B)False
Answer: False
Q4) The first volume of the Praeger Perspectives deals with _____ and takes a broad view of entrepreneurship as a form of human action,pulling together the current research with respect to cognitive,economic,social,and institutional factors that influence entrepreneurial behavior.
Answer: people
Page 4
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Chapter 3: The Entrepreneurial Process
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Sample Questions
Q1) In the entrepreneurial process depicted in the Timmons Model,the required shape,size,and depth of a team and resources are established by the shape,size,and depth of a(n)____.
Answer: opportunity
Q2) In case of competition,the entrepreneurial task is to find a way to direct the arena of competition toward the areas where a new venture is at a competitive disadvantage.
A)True
B)False
Answer: False
Q3) Entrepreneurs for whom issues of family roots and location take precedence and thereby wish to be with and work with their family may lead them to develop a ________ business.
Answer: lifestyle
Q4) The threshold concept proposes that the odds of success change as a venture reaches a critical mass of over $8 million in sales and 50 employees.
A)True
B)False
Answer: False
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Chapter 4: Clean Commerce and Sustainable Enterprise
Movements Are an Opportunity Sea Change
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44 Verified Questions
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Sample Questions
Q1) At a macro level,green chemistry provides the means of shifting away from a petrochemical-based economy to a _____ economy.
Q2) _____ are a means to gain access to fresh ideas,emergent perspectives,and new scientific insights.
Q3) Which of the following is a strategic facet of looking through a sustainability lens?
A) Adopting radical incrementalism
B) Severing weak ties
C) Increasing E-factor
D) Thinking like a molecule
Q4) Systems thinking refers to the practice of tracking materials through their respective life cycles.
A)True
B)False
Q5) The _____ standards provide sustainable building rating systems under the U.S.Green Building Council.
Q6) How are businesses affected by the seismic shift toward clean commerce and sustainable enterprise movements?
Q7) What are the advantages of establishing weak ties?
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Chapter 5: Opportunity Recognition
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63 Verified Questions
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Sample Questions
Q1) _____ is defined as the period of revenue growth in the life cycle of target industry when the slope of the revenue growth is increasing.
Q2) Price-cutting and other competitive strategies in highly concentrated markets can present a significant ________ for new entrants.
Q3) The primary reason that first-time entrepreneurs run out of cash at a faster rate than they bring in customers and profitable sales is that they have not focused on the right opportunity.
A)True
B)False
Q4) A strong management team recognizes the window of opportunity and develops competitive advantage to give a business additional leverage to exploit the market opportunity.
A)True
B)False
Q5) According to the late Herbert Simon,Nobel laureate,the _____ is a creative process which involves the creative linking,or cross-association,of two or more in-depth "chunks" of experience,know-how,and contacts.
Q6) What are the five attributes of real business opportunities?
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Chapter 6: Opportunities for Social Entrepreneurship
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36 Verified Questions
36 Flashcards
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Sample Questions
Q1) A social entrepreneur must accept that a wicked problem is never fully solved,and the solution is not likely to meet all expectations.
A)True
B)False
Q2) By definition,any form of entrepreneurship is called social enterprising.
A)True
B)False
Q3) The Grameen Bank in Bangladesh offers:
A) microloans.
B) focused loans.
C) collateralized loans.
D) amortized loans.
Q4) Venture philanthropy provides value-added funding for nonprofit organizations to increase their potential for developing revenue streams.
A)True
B)False
Q5) What are a few pressing social problems that could provide opportunity spaces for social entrepreneurs?
Q6) What is the result of social entrepreneurship?
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Chapter 7: The Business Plan
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27 Verified Questions
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Sample Questions
Q1) In a business plan,the business concept should be described vaguely in the executive summary to attract more venture capitalists.
A)True
B)False
Q2) Which of the following is true about writing a business plan?
A) It is the same as screening an opportunity.
B) It is best thought of as a one-shot process.
C) It is not a good idea to hire an outside professional to write the business plan.
D) It is best to outsource this activity to make the plan more attractive to potential investors.
Q3) Business plans are seldom obsolete and last throughout the lifecycle of a project.
A)True
B)False
Q4) Who develops a business plan?
Q5) Briefly discuss the guidelines to be followed for writing an effective business plan.
Q6) Discuss the guidelines to be followed for effectively closing a venture deal.
Q7) Briefly discuss any two uses of a business plan.
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Chapter 8: The Entrepreneurial Leader and the Team
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41 Verified Questions
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Sample Questions
Q1) Name the different types of contributions that should be considered when slicing up the equity pie.
Q2) In rapid-growth firms,power and control are delegated and leadership is shared.
A)True
B)False
Q3) Discuss the principles founders should keep in mind when they decide how to compensate themselves and the team,new talent,and the brain trust in their ventures.
Q4) There exists in growing new ventures a common _____ system that is most evident in behavior and attitudes and is difficult to articulate and elusive to measure.
Q5) The _____ stage of venture growth is by far the most perilous stage requiring the drive and talent of a lead entrepreneur.
Q6) From the high-growth stage of venture growth,a company moves to the _____ stage.
Q7) The nascent stage can be as short as a few months or can last years.
A)True
B)False
Q8) The research and development stage of venture growth is sometimes referred to as the _____ stage.
Q9) In rapid-growth firms,power and control are _____ and leadership is ____.
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Chapter 9: Ethical Decision Making and the Entrepreneur
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34 Verified Questions
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Sample Questions
Q1) Immanuel Kant's _____ approach is pursued without concern for the outcomes of actions but according to whether the action is something that an ethical person would do.
Q2) When making ethical decisions,always choose an approach you feel most comfortable with and stick to those principles.
A)True
B)False
Q3) How can one apply the different approaches to ethics in a decision-making process?
Q4) Broken partnerships can often be traced to apparent differences in the personal ethics among the members of a management team.
A)True
B)False
Q5) What are the issues associated with the Aristotelian approach to ethics?
Q6) The _____ construct classifies moral judgment into six stages of development.
Q7) The closer the stakeholders are to an individual,the less effect they will have on his or her decision making.
A)True
B)False
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Chapter 10: Resource Requirements
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Sample Questions
Q1) Which of the following legal issues should be of least concern to an entrepreneur building a high-growth venture?
A) Employee plans
B) Federal and state regulations
C) Mergers and acquisitions
D) Tax shelters
Q2) In a study of boards,and specifically venture capitalists' contributions to them,entrepreneurs tended to value financial expertise over operating experience.
A)True
B)False
Q3) Discuss the three important factors that an entrepreneur must consider when selecting accountants.
Q4) During the chaotic startup phase of a venture,entrepreneurs should outsource the legal aspects of decisions and agreements to an expert attorney.
A)True
B)False
Q5) A financing strategy will probably encompass a combination of both _____ and _____ capital.
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Chapter 11: Franchising
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Sample Questions
Q1) When defining the target audience,_____ variables segment potential customers by their knowledge,attitude,and use of products in order to project usage of the product or service.
Q2) Discuss the three different levels at which marketing programs are funded and implemented in a franchise offering.
Q3) The Timmons Model identifies the three components of opportunity as market demand,market size and structure,and ____.
Q4) Franchisors are bound to best-price requirements because of changing markets,competitors,and U.S.antitrust law.
A)True
B)False
Q5) In the Franchise Relationship Model (FRM),the financial structure flows from pro forma analysis of customer demand and the cost associated with development and execution of the ____.
Q6) The value of a franchise is enhanced when the delivery of a product validates the marketing message.
A)True
B)False
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Chapter 12: Entrepreneurial Finance
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Sample Questions
Q1) Short-term debt is incurred for what time frame?
A) Less than six months
B) One year or less
C) One to five years
D) Depends on the deal structure
Q2) List the factors that can affect the availability of various financing options and their suitability and cost.
Q3) _____ is the art and science of quantifying value creation,slicing the value pie,and managing and covering financial risk.
Q4) A new or existing business needs to obtain both equity and debt financing if it is to have a sound financial foundation.
A)True
B)False
Q5) A fund-raising strategy commits a company to actions that may have an impact on future financing options.
A)True
B)False
Q6) Short-term debt is incurred for _____ months or less.
Q7) How is the increase in net total operating capital calculated?
Page 14
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Chapter 13: Obtaining Venture and Growth Capital
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Sample Questions
Q1) What is the average number of hours that a venture capitalist will spend conducting due diligence on a promising venture?
A) 25
B) 60
C) 120
D) 400
Q2) With mezzanine financing,the principle amount may be converted into equity.
A)True
B)False
Q3) What is the size of funds provided by mainstream venture capitalists?
A) $25-$50 million under management
B) $50-$100 million under management
C) $250-$499 million under management
D) Over $500 million under management
Q4) ESOP stands for ____.
Q5) Regulation D is the result of the first cooperative effort by the small business investment companies (SBICs)to develop customized exemptions from securities registration for small issuers.
A)True
B)False
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Chapter 14: The Deal: Valuation, Structure, and Negotiation
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Sample Questions
Q1) By _____ their capital contributions,venture capitalists maintain the right to abandon a project whose prospects look dim.
Q2) Staged investment is a method used to manage risk.
A)True
B)False
Q3) The First Chicago evaluation method employs a higher discount rate and applies it to an expected cash flow.
A)True
B)False
Q4) Staged capital commitments give strategic advantage to the:
A) investor.
B) entrepreneur.
C) underwriters.
D) advisors.
Q5) Entrepreneurs should rely on expert legal and accounting advice to protect them during the deal-making process.
A)True
B)False
Q6) Explain how strategic circumference relates to fund raising.
Page 16
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Chapter 15: Obtaining Debt Capital
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Sample Questions
Q1) Effective entrepreneurs think of the process of obtaining a loan as a sales job.
A)True
B)False
Q2) Leasing credit criteria are very similar to the criteria used by commercial banks for equipment loans.
A)True
B)False
Q3) Unlike equity investors,banks place very little weight on the quality of the management team.
A)True
B)False
Q4) Why do startups have a more difficult time borrowing money than existing businesses?
Q5) Identify a characteristic of factoring as a form of accounts receivable financing.
A) It is an inexpensive method of financing.
B) It quickly turns receivables into cash.
C) It ensures that there is no interest charged for money advanced.
D) It imposes on its users a credit agency fee.
Q6) Factoring is accomplished on a _____ value of the receivables pledged.
Page 17
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Chapter 16: Leading Rapid Growth, Crises, and Recovery
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Sample Questions
Q1) Identify the basic dimension of organizational climate that describes the extent to which an employee feels a sense of cohesion and team spirit.
A) Clarity
B) Standard
C) Esprit de corps
D) Commitment
Q2) Bankruptcy can provide only for the liquidation of the business;reorganization is not an option.
A)True
B)False
Q3) One challenge fast-growth firms face is that of an abundance of viable opportunities.
A)True
B)False
Q4) Organizational climate is created both by the expectations people bring to the organization and by the practices and attitudes of the key managers.
A)True
B)False
Q5) What is the formula for calculating a company's Net Liquid Balance (NLB)?
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Chapter 17: The Family As Entrepreneur
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Sample Questions
Q1) The job of families who desire to be enterprising is to determine how to generate and exploit their _____ familiness and to minimize or shed their _____ familiness.
Q2) When entrepreneurial processes are institutionalized through governance structures and policies,this promotes growth and change activities.
A)True
B)False
Q3) The goal of dialogue is to find solutions that are not constrained by the boundaries of either of the original positions.
A)True
B)False
Q4) As enterprise refers to economic activity,_____ is the action of generating new economic activity and building long-term value across generations.
Q5) Discuss why a financial mind-set is more effective than an operational mind-set.
Q6) Most of the small and midsized family-owned businesses in the U.S.are modest and typical mom-and-pop operations.
A)True
B)False
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Page 19
Chapter 18: The Harvest and Beyond
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Sample Questions
Q1) Successful entrepreneurs create _____ that results in capital gain.
Q2) Having a harvest goal and crafting a strategy to achieve it are what separate successful entrepreneurs from the rest of the pack.
A)True
B)False
Q3) _____ markets provide access to long-term capital while also meeting subsequent capital needs.
Q4) If begun early in the venture-building process,shaping a harvest strategy is a straightforward task.
A)True
B)False
Q5) Which harvest option can force a leadership team to focus on short-term profits and performance results?
A) Management buyout (MBO)
B) Employee Stock Ownership Plan (ESOP)
C) Initial Public Offering (IPO)
D) Strategic Alliance
Q6) Harvesting at the right time,willingly,involves hitting one of the many _____ that entrepreneurs face.
Page 20
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