Q&A Hero

Q: A(n) ________ is an early user of a firm's product who is willing to give a testimonial regarding his or her experience with the product. A) tribute account B) reference account C) approval report D) appreciation account E) acknowledgment report

Q: A ________ is something that takes on a physical form, such as an MP3 player or a laptop computer. A ________ is an activity or benefit that is intangible, such as an airplane trip or advice from an attorney. A) product, service B) service, component C) component, service D) formation, service E) service, product

Q: A firm's ________, in the context of its marketing mix, is the good or service it offers to its target market. A) conception B) idea C) formation D) product E) invention

Q: A firm's marketing mix consists of the following four elements: A) product, price, promotion, and place B) passion, pride, promotion, and place C) passion, pleasure, product, and price D) enthusiasm, passion, product, and price E) place, promotion, passion, and product

Q: Which of the following is not one of the four elements that constitute a firm's marketing mix? A) price B) promotion C) passion D) place (or distribution) E) product

Q: A firm's ________ is the set of controllable, tactical marketing tools that it uses to produce the response it wants in the target market. A) tactical mix B) promotional blend C) organizational mix D) marketing mix E) selling mix

Q: The Savvy Entrepreneurial Firm feature in Chapter 11 focuses on Airbnb, the company that created a marketplace for people to list, discover, and book unique spaces in people's homes or apartments while traveling. According to the feature, Airbnb was able to generate substantial buzz about its service via the use of:A) FacebookB) Google AdSenseC) blogsD) newspaper adsE) Twitter

Q: According to the textbook, a successful brand can increase the market value of a company by: A) 5 to 10 percent B) 20 to 30 percent C) 40 to 50 percent D) 50 to 75 percent E) 75 to 100 percent

Q: ________ is a term that denotes the set of assets and liabilities that are linked to a brand and enable it to raise a firm's valuation. A) Trademark equity B) Brand equity C) Logo equity D) Trademark value-added E) Trade name strength

Q: Which of the following statements is incorrect regarding the process of building a company's brand? A) A firm's name, logo, Web site design, and even its letterhead are part of its brand. B) One of the keys to effective branding is to create a strong personality for a firm. C) Some companies monitor the integrity of their brands through brand management. D) Startups must build a brand from scratch, which starts with selecting the company's name. E) Most experts recommend a heavy reliance on advertising in building a firm's brand.

Q: Creating ________ means creating awareness and a sense of anticipation about a company and its offerings. A) ruckus B) noise C) clatter D) clamor E) buzz

Q: According to the textbook, a brand is all of the following except: A) reputation B) collection of memories C) a pledge D) a promise E) a written warranty

Q: The What Went Wrong feature in Chapter 11 focuses on Ugobe, the company that made Pleo, a small robotic baby dinosaur. Ugobe failed primarily because it didn't establish a clear:A) positioning strategyB) branding strategyC) social media strategyD) financial strategyE) advertising strategy

Q: Some companies monitor the integrity of their brands through a program of: A) brand administration B) brand persistence C) brand determination D) brand resolution E) brand management

Q: Which of the following statements is correct regarding the concept of branding? A) Brands cannot be built through advertising, public relations, sponsorships, social media, or similar techniques. B) A company doesn't normally want its customers to identify with its brand. C) Startups usually start with an established brand. D) A brand can be one of a company's most valuable assets. E) A brand can denote a negative impression of a company.

Q: InstyMed's phrase "We make patients better quicker" is an example of a(n): A) tagline B) grabline C) notice-line D) catchline E) attention-line

Q: Nike's familiar phrase "Just do it" is an example of a(n): A) attention-line B) tagline C) notice-line D) catchline E) grabline

Q: A product attribute map is used to help a firm determine: A) if it is emphasizing benefits rather than features B) if its branding strategy is appropriate C) if its market segmentation is correct D) if its positioning strategy is appropriate E) if its target market is appropriate

Q: A ________ illustrates a firm's positioning strategy relative to its major rivals. A) product attribute map B) positioning analysis grid C) positioning plot D) competitive analysis grid E) positioning diagram

Q: Which of the following selections is incorrect regarding a firm's "positioning" strategy? A) Position is concerned with how the firm is situated relative to its competitors. B) A firm's decision about how to position itself relative to its competitors starts with a product or service idea that is tested and refined through feasibility analysis and marketing research. C) Position is concerned with how a firm is situated relative to competitors. D) Once a firm positions itself in a certain way, it must be able to follow through with a product or service offering that lives up to the image it has created. E) After selecting a positioning strategy, the firm's next step is to select a target market.

Q: A(n) ________ is the set of attributespositive or negativethat people associate with a company. A) emblem B) logo C) symbol D) brand E) trade name

Q: Research in Motion (RIM) is a handheld computer company that focuses specifically on business users that need dependable access to e-mail and the Internet while away from their office. For RIM, this specific type of user within the large business market segment is referred to as its: A) gap market B) task market C) position market D) hole market E) niche market

Q: A ________ is a place within a market segment that represents a narrower group of customers with similar interests. A) position market B) niche market C) slot market D) spot market E) gap market

Q: What is a business angel? Describe the prototypical business angel. How much money do business angels typically invest in a single company?

Q: What is the difference between equity funding and debt financing? What are the most common sources of equity funding and debt financing?

Q: What is an elevator speech? How did it get its name?

Q: What is meant by the term "bootstrapping"? Provide several examples of the ways that entrepreneurs bootstrap to raise money or cut costs?

Q: Why do most firms need funding? Provide a brief explanation of each reason.

Q: Historically, the vast majority of SBIR Phase 1 proposals are approved.

Q: The SBIR and STTR programs are two important sources of early stage funds for technology firms.

Q: A lease is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments.

Q: Crowdfunding is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.

Q: Approximately 80 percent of the 9,000 banks in the United States participate in the SBA Guaranteed Loan Program.

Q: Historically, commercial banks have been viewed as an excellent source of financing for startup firms.

Q: Venture capital involves getting a loan or selling corporate bonds.

Q: The percentage of the profits the venture capitalist gets is called the "carry."

Q: Venture capital is money that is invested by venture capital firms in startups and small businesses with exceptional growth potential.

Q: Most business angels remain fairly anonymous and are matched up with entrepreneurs through referrals.

Q: The number of angel investors in the United States has decreased dramatically over the past decade.

Q: Venture capitalists are individuals who invest their personal capital directly in startups.

Q: Angel investors, private placement, venture capital, and initial public offerings are the most common sources of equity funding.

Q: Debt financing means exchanging partial ownership in a firm in exchange for cash.

Q: The ideal candidate for a bank loan is a firm with a strong cash flow, low leverage, audited financial statements, good management, and a healthy balance sheet.

Q: Bootstrapping is the use of creativity, ingenuity, and any means possible to obtain resources other than borrowing money or raising capital from traditional sources.

Q: There are three common sources of "personal" financing for a startup firm: personal funds, friends and family, and bootstrapping.

Q: The vast majority of founders contribute personal funds along with sweat equity to their ventures.

Q: Typically, the seed money that gets a company off the ground comes from a commercial bank.

Q: There are three reasons that most firms need to raise money during their early life: cash flow challenges, capital investments, and lengthy product development cycles.

Q: The What Went Wrong? feature in Chapter 10 focuses on GoCrossCampus, a company that developed a strategy game in which students from opposing schools competed online to conquer each other's campuses. Which of the following was not identified as one of the reasons that led to GoCrossCampus's failure?A) The company never generated the revenue it needed to be a viable ongoing business.B) The fund-raising process was time-consuming.C) Products were released quickly, and in some cases before they were ready.D) Having five cofounders proved to be problematic.E) The company was never able to raise investment capital.

Q: Which of the following statements is incorrect about grant programs? A) Granting agencies are very visible and well-known, so it's normally not hard to find one. B) The federal government has grant programs beyond the SBIR and STTR programs. C) It's important to avoid grant-related scams. D) There are a limited number of organizations that offer new businesses grants. E) There are private foundations that grant money to both existing and startup firms.

Q: The main difference between the SBIR and the STTR programs is that the STTR program requires the participation of: A) an attorney B) a venture capitalist C) researchers working at universities or other research institutions D) a certified public accountant E) a government agency in conducting the research

Q: The SBIR is a ________, meaning that firms that qualify have the potential to receive more than one grant to fund a particular proposal. A) two-phase program B) three-phase program C) six-phase program D) nine-phase program E) twelve-phase program

Q: Which "phase" of the SBIR Program is intended to demonstrate the proposed innovation's technical feasibility? A) Phase I B) Phase II C) Phase III D) Phase V E) Phase X

Q: The ________ is a competitive grant program that provides over $1 billion per year to small businesses for early-state and development projects. A) SBTA Program B) SBIR Program C) SBAP Program D) SAIR Program E) SBTR Program

Q: The major advantage of leasing is that: A) it enables a company to have access to average or above average facilities and equipment B) it enables a company to acquire the use of assets with little or no down payment C) it is cheaper in the long run than purchasing D) a lease agreement is easier to negotiate than a purchase agreement E) it is easier to obtain credit on a lease than a purchase

Q: A(n) ________ is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for payments. A) assurance B) loan C) guarantee D) warranty E) lease

Q: Prosper is the best known: A) factor B) provider of SBA guaranteed loans C) peer-to-peer lending network D) provider of vendor credit E) crowdfunding network

Q: ________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash. A) Factoring B) Vendor credit C) Peer-to-peer lending D) Crowdfunding E) Leasing

Q: According to a survey conducted by the National Small Business Association between August 2008 and December 2009, between ________ percent of business owners utilized vendor credit. A) 12 and 18 B) 17 and 21 C) 22 and 29 D) 35 and 40 E) 52 and 58

Q: The most notable SBA program available to small businesses is the: A) SBA 1060 Guaranty B) Code 604 Guaranty Program C) 7(A) Guaranty Program D) SBA 101 Program E) Small Business 401 Program

Q: There are two major advantages of getting a loan versus investment capital: A) the money doesn't have to be paid back and lenders typically take an active interest in their borrowers B) banks are reliable sources of funding for startups and interest payments are tax deductible C) the money doesn't have to be paid back and no ownership in the firm is surrendered D) no ownership in the firm is surrendered and interest payments are tax deductible E) banks are reliable sources of funding for startups and lenders typically take an active interest in borrowers

Q: Historically, commercial banks: A) have been a good source of funds for startup firms B) have not funded startup firms at all C) have been a good source of funds for manufacturing firm startups but not for service firm startups D) have been a good source of funds for service firm startups but not for manufacturing firm startups E) have not been a good source of funds for startup firms

Q: Debt financing involves: A) raising venture capital or securing a private placement B) selling corporate bonds or selling stock via an IPO C) getting a grant or selling corporate bonds D) getting a loan or raising venture capital E) getting a loan or selling corporate bonds

Q: As part of drumming up support for an IPO, the investment bank typically takes the top management team of the firm wanting to go public on a ________, which is a whirlwind tour that consists of meetings in key cities where the firm presents its business plan to groups of investors. A) pitch show B) road show C) pitch tour D) road trip E) tornado tour

Q: A(n) ________ is an institution, such as Credit Suisse First Boston, that acts as an underwriter or agent for a firm engaged in an initial public offering. A) venture bank B) statutory bank C) fiduciary bank D) investment bank E) public bank

Q: The first sale of stock by a firm to the public is referred to as a(n): A) original public submission B) first unrestricted offering C) preemptive initial offering D) original open offering E) initial public offering

Q: In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture's life to fund the development of a prototype and feasibility analysis is referred to as: A) seed funding B) second-stage funding C) first-stage funding D) mezzanine financing E) startup funding

Q: An important part of obtaining venture capital funding is going through ________, which refers to the process of investigating the merits of a potential venture and verifying the key claims made by the business plan. A) appropriate diligence B) fit diligence C) due diligence D) prior diligence E) responsible diligence

Q: Once a venture capitalist makes an investment in a firm, subsequent investments are made in rounds and are referred to as: A) later funding B) successive funding C) subsequent backing D) follow-on funding E) ensuing backing

Q: According to a source cited in the textbook, venture capitalists anticipate that the percentage of investments that will be home runs is about ________ or less. A) 20 percent B) 50 percent C) 5 percent D) 33 percent E) 45 percent

Q: In 2010, venture capital firms funded ________ deals . A) 800 B) 3,276 C) 1,265 D) 6,211 E) 7,255

Q: Venture capital firms are ________ of money managers who raise money in "funds" to invest in startups and growing firms. A) limited partnerships B) finance associations C) consortiums D) collations E) strategic partnerships

Q: ________ are limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms. A) Venture capital firms B) Business angels C) Institutional investors D) Investment bankers E) Business capitalists

Q: According to the textbook, the unique value provided by business angels is: A) they are willing to make relatively large investments B) they are willing to make relatively small investments C) they require a fairly low rate of return on their money D) they invest money but typically don't take a seat on a company's board of directors E) they are easy to find

Q: Which of the following statement is not correct regarding business angels? A) Business angels invest in more startups on a yearly basis than venture capitalists. B) The number of angel investors has decreased dramatically over the past decade. C) Business angels usually take a seat on the board of directors of the firms in which they invest. D) Business angels are valuable because of their willingness to make relatively small investments. E) Business angels are difficult to find.

Q: According to a study cited in the textbook, ________ of private companies meet the criterion established by business angels for investment. A) 2 percent to 4 percent B) 10 percent to 15 percent C) 18 percent to 30 percent D) 32 percent to 48 percent E) 60 percent to 70 percent

Q: The Partnering for Success feature in Chapter 10 focuses on TechStars and Y Combinator: A New Breed of Start-Up Incubators. TechStars is headquartered in ________ while Y Combinator is headquartered in ________.A) the Silicon Valley, ChicagoB) Boulder, CO, New York CityC) Austin, TX, New York CityD) the Silicon Valley, Austin, TXE) Chicago, Boulder, CO

Q: A brief carefully constructed statement that outlines the merits of a business opportunity is called a(n): A) subway speech B) sway speech C) bootstrap speech D) teaser speech E) elevator speech

Q: Which of the following set of characteristics places a startup in the strongest position to apply for equity funding? A) weak cash flow, high leverage, low-to-moderate growth, unproven management B) strong cash flow, low leverage, audited financials, good management, healthy balance sheet C) unique business idea, strong cash flow, low-to-moderate growth, broad market D) strong cash flow, high leverage, low-to-moderate growth, unproven management E) unique business idea, high growth, niche market, proven management

Q: The three most common forms of equity funding are: A) friends and family, venture capital, bank loans B) SBIR grants, SBA guaranteed loans, bank loans C) initial public offerings, business angels, venture capitalists D) friends and family, business angels, bootstrapping E) SBIR grants, venture capital, initial public offerings