Entrepreneur Challenge MCQs
Entrepreneur Challenge MCQs
These Entrepreneur Challenge multiple-choice questions and their answers will help you strengthen your grip on the subject of Entrepreneur Challenge. You can prepare for an upcoming exam or job interview with these 50+ Entrepreneur Challenge MCQs.
So scroll down and start answering.
1: What is an Exit Strategy?
A. The method by which a venture capitalist or business owner intends to get out of an investment that he or she has made in the past.
B. As outlined in Lee Iacocca's book, it is the gift you provide to a Japanese business man/woman at after a meeting to leave them feeling positive about working with you
C. Part of a disaster relief plan which outlines how to leave a building in response to an emergency.
D. Defining how a users logs out of your website or service
2: What is the primary difference between angels and venture capitalists?
A. Angel typically require only informal agreements, Venture capitalists require a legally binding agreement
B. Angels invest their own funds, venture capitalists invest others funds
C. Angels only require a minority share, Venture capitalists require majority ownership
D. Angels generally make larger investments in comparison to those made by venture capitalists
3: Which type of venture exit typically has the largest payoff for founders and investors?
A. Merger
B. IPO
C. Secondary sale
D. Recapitalization
E. Acquisition
4: What is "deal fatigue"?
A. When the other party in a negotiation gives in to your terms because they are exhausted
B. The burnout that occurs when you push your sales people too hard
C. The negative signaling effect of trying to raise money for a very long time.
5: The idea "fail fast, fail often" refers to?
A. Startup failure rate
B. Lean startup philosophy
C. Fundraising success rate
D. Poorly designed products
6: For a company that runs a free web app, which of these metrics would be described as a vanity metric?
A. Revenue
B. Monthly active users
C. Total registered users
D. Daily active users
7: What are the "Three F's" of early-stage financing?
A. Forego Family Financing
B. Fill, Finalize, and Forget
C. Find Friends First
D. Friends, Family, and Fools
8: Which of the following involves the least outside capital coming into the company?
A. Bootstrap
B. Private Equity
C. Venture Capital
D. Friends & Family
E. Angel Investment
9: What does it mean to "syndicate" an investment?
A. To have one investment spread out over multiple time periods (aka tranches).
B. To have multiple companies or groups participate in a single investment round and share diligence findings.
C. To have multiple investments from the same company or group in the same startup (i.e. over multiple rounds).
D. To have one company or group funding multiple startups.
10: Which company did Larry Page co-found?
A. Facebook
B. LinkedIn Corporation
C. Microsoft Corporation
D. Google, Inc.
11: True or False: In a limited partnership the day-to-day operations are controlled by general partners and funded by limited or silent partners who are legally responsible for losses based on the amount of their investment.
A. True
B. False
12: What is attrition?
A. An increase of employees in a start up company.
B. The percentage increase of investors between seed funding and round B funding in a start up company.
C. A reduction or decrease in numbers, size, or strength of a start up company.
13: What is the Valley of Death in regards to fundraising?
A. time between first investment and first profits
B. time between idea conception and product launch
C. time between first investment and exit
D. time before the first investment
14: What is a split test?
A. Testing a variety of single-variable samples against one another in order to improve response rates
B. A "lean startup" concept that involves installing a link to a new feature without actually building the feature, in order to gauge user interest.
15: What's CoCA?
A. Cash on Cash Accounting
B. Cost of Conversion and Attrition
C. Cola
D. Cost of Content Acquisition
E. Cost of Customer Acquisition
16: What's the "DA" stand for in EBITDA?
A. Debt and Administration
B. Debt Amortization
C. Depreciation and Amortization
17: What does the legal acronym DBA traditionally stand for?
A. Don't be afraid
B. Doing Business Association
C. Doing Business As
D. Dun & Bradstreet Archive
18: Sequoia is a(n):
A. Venture Capitalist group
B. Social Network Application
C. Mobile Application
D. Environmental Platform
E. Angel Group
19: What is a convertible note?
A. A debt financing in which the debt converts to equity at a future equity financing
B. Options you provide to your employees that convert into equity when they vest fully
C. The loan on your new Audi 24 convertible
20: Entrepreneurs who operate a self-financed startup without external fundraising are said to be?
A. Lucky
B. In the green
C. Cash flow positive
D. Bootstrapping
21: What is a Cap Table?
A. It's an ancient Mayan surface used in bloodletting ceremonies for business owners that lost investors money
B. It's the place where paperwork is signed for deals
C. Similar to a periodic table but filled with "Elements" associated with business
D. A breakdown of who owns what in the business
22: What is one of the differences between a trademark and a patent?
A. Trademarks, unlike patents, can be renewed forever as long as they are being used in business.
B. A trademark can only be used for a digital product, a patent is for a physical product.
C. There is no difference, they are essentially the same.
23: If you get $10,000 for 10% of your company, your company valuation is...
A. 1,000,000
B. 100,000
C. 20,000
D. 10,000
E. 50,000
24: What does "ramen profitable" mean for a startup?
A. Has a big client or sale in the pipeline
B. Makes just enough to pay the founders' living expenses
C. Consults on the side for money
D. Receives seed financing from investors
25: In start ups, the term "M&A" refers to:
A. Mergers and Acquisitions
B. Management and Attrition
C. Money and Acquisitions
D. Mergers and Attrition
26: Which of the following isn't part of the traditional Marketing Mix?
A. Place
B. Product
C. Partners
D. Price
E. Promotion
27: What is Due Dilligence?
A. A detailed method for managing a business.
B. A formal estimate of the value of something on the open market.
C. Process of vetting a business's financial information, team, and other important information that may influence the outcome of an investment.
D. Process by which Angel Investors speak with company founders to decide how much money they can make.
28: What is "sweat equity"?
A. The opposite of "dry equity"
B. The hardest working, yet smelliest person on staff
C. A party's contribution to a project in the form of effort - as opposed to financial equity
D. A term used to measure how hard someone worked to raise funds
29: An entrepreneur who continually comes up with new ideas and starts new companies is considered a:
A. Lifestyle entrepreneur
B. Serial entrepreneur
C. Social entrepreneur
30: What's the classic 80/20 rule (the Pareto principle) with regards to marketing?
A. 20% of sales close
B. 80% percent of the market shares the same needs
C. 80% of your profit comes from 20% of your customers.
D. 80% of your time makes up 20% of your profits.
31: What is a seed round?
A. The kernal of an idea with which an entrepreneur starts a company.
B. First investment round that 'seeds' the company's financials.
C. Like the Knights of the Round table, the "round" of advisors who help an entrepreneur refine his/her business model.
32: How many owners may an LLC have?
A. Unlimited
B. 250
C. 150
D. 100
E. 200
33: What does the term "priced round" mean?
A. An equity financing in which the company and investors agree on a pre-money valuation
B. The exercise price on the options you've granted to employees, advisors, etc.
C. When you take your team out for a round of drinks
34: What is a sole proprietorship?
A. A serial entrepreneur with a history of not working with co-founders.
B. A idea brainstormed by a single person.
C. A business funded by a sole investor.
D. A business owned and operated by one person.
35: What is an Incubator?
A. Places senior executives in a failing start-up
B. Provides workspace, coaching, and support to entrepreneurs & early-stage company's.
C. A short term financing option
D. Helps increase a company's evalutation
36: Which of the following is NOT a recognized entrepreneurial influencing skill?
A. Criticism and punishment
B. Teamwork and people management
C. Leadership and vision
D. Helping and resolving conflict
37: An Entrepreneur is a person who
A. A person without a job
B. Takes a risk to found a company in pursuit of profit
C. Anyone who fills out a W-9
D. A manager in an s-corporation
E. An individual who makes money on the internet
38: What does it mean to be oversubscribed?
A. The number of orders for your product exceeds your inventory on hand
B. You've subscribed to too many business publications like "Inc", "Fast Company", etc.
C. More investors want to invest than you have room for in your round
39: Sole proprietorships and LLC's are similar in that they:
A. are both subject to liability
B. allow for pass-through taxation
C. can be set up without registration with the state
40: How is the post-money valuation of a company determined?
A. Pre-money valuation plus the invested funds
B. The net present value (NPV) of the forecasted future cash flows for 10 years.
C. Whatever you can negotatiate - push hard for the highest possible post-money
D. It's a magical mix of how excited the investors are, the perceived value of the work you have done so far, and the size of the market
41: What does "MVP" stand for in Lean Startup methodology?
A. Maximum Value Proposition
B. Minimum Viable Product
C. Most Valuable Product
D. Most Viable Product
42: What is a "discount rate" on a convertible note?
A. A lowering of the amount of cash added by investors.
B. A risk premium of additional equity for earlier investors.
C. A reduction in equity on conversion negotiated by the entrepreneur.
43: What is Guy Kawasaki's famous 10/20/30 rule?
A. 10 slides, 20 minutes, 30 point font
B. Focus groups should have 10 people attending, ask 20 key questions, and take 30 minutes total
C. 10 person team, 20 months, 30 million dollar exit
44: What is the maximum number of shareholders an S corporation may have?
A. 75
B. 50
C. 150
D. 100
E. 25
45: The challenge of "crossing the chasm" refers to reaching which group of customers?
A. Early majority
B. Innovators
C. Early adopters
D. Late majority
46: What is another word/term for using feedback from users to improve your product/service?
A. Lean Startup
B. Client Monitoring
C. Feedback Reporting
D. Customer Development
E. Entrepreneur's Golden Rule
47: According to Dave McClure of 500 Start-ups, what three people does every tech start-up need?
A. Hustlers, Hackers, Designers
B. Investors, Founders, Employees
C. Leaders, Visionaries, Soldiers
48: What legal entity is the most Venture Capital friendly?
A. S-Corp
B. LLP
C. C-Corp
D. LLC
49: What type of branding is considered the default "brand architecture" and is used by most entrepreneurs?
A. Product branding
B. Co-branding
C. Hybrid branding
D. Corporate branding
50: For high-growth ventures, which series of funding is typically used for sales acceleration and marketing over initial product development?
A. Seed funding
B. Bridge funding
C. Series B funding and beyond
D. Series A funding
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