New Venture Creation Entrepreneurship for the 21st Century 10th Edition by Spinelli – Test Bank

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Sample Questions Posted Below

 

 

 

 

5

Student: ___________________________________________________________________________

1. The fit of the lead entrepreneur and the management team with an opportunity is of the utmost importance.

True    False

 

2. For owners of small businesses, extremely long hours of 70, 80, or even 100 hours a week, and rare vacations, are often the rule rather than the exception.

True    False

 

3. One of the big differences between the growth- and equity-minded entrepreneur and the traditional small business owners is that the entrepreneur is willing to use leverage financing.

True    False

 

4. The best and the brightest venture capitalists rarely miss a homerun opportunity when it is presented to them.

True    False

 

5. The best opportunities are focused enterprises; what you start out to do is what you end up doing.

True    False

 

6. The vast majority of startup entrepreneurs spend inordinate amounts of time chasing inappropriate funding sources for their venture.

True    False

 

7. The business environment in which an entrepreneur launches his or her venture cannot be altered significantly.

True    False

 

8. Social and nonprofit organisations do not need to be as concerned with positive cash flow since they operate in a different type of market than for-profit organisations.

True    False

 

9. In a free enterprise system, opportunities are held up and prevented by such factors as changing circumstances, chaos, confusion, inconsistencies, and information gaps.

True    False

 

10. The vast majority of radical innovation occurs in new and smaller firms.

True    False

 

11. Marketplaces dominated by large, multibillion-dollar players are impenetrable by smaller, entrepreneurial companies since they are unable to compete with entrenched, resource-rich, established companies.

True    False

 

12. 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.

True    False

 

13. The impact on firm performance of industry structure is strongly mitigated by controllable factors such as the strategy selected for entry.

True    False

 

14. Asset-intensive, high-margin businesses generate the highest profits and sustainable growth.

True    False

 

15. To gain market entry with high-value-added products or services in a growing market, it is best to price slightly below competitors.

True    False

 

16. Data available about market characteristics, competitors, and the like are frequently inversely related to the real potential of an opportunity.

True    False

 

17. One of the key differences between the growth and equity-minded entrepreneur and the traditional small business owner is that the entrepreneur thinks:

A. strategically

 

B. optimistically

 

C. bigger

 

D. smarter

 

18. The journey from idea to high potential opportunity is:

A. illusive, contradictory and perilous

 

B. contradictory, complex, and illusive

 

C. perilous, complex, and contradictory

 

D. None of the given answers

 

19. The 5 per cent of entrepreneurs that create high potential ventures reveal:

A. a process more related to a work of art than any rational type design

 

B. a process revolving around luck more than rationality

 

C. the use of a highly-detailed checklist

 

D. the use of a highly-developed business plan.

 

20. The highly organic and situational character of the entrepreneurial process underscores the criticality of determining:

A. fit and balancing time and tide

 

B. risk, fit, and balance

 

C. fit and balancing risk and reward

 

D. balancing risk and reward

 

21. What is one of the key aspects of the evolution of high potential ventures?

A. the benign context

 

B. the turbulent context

 

C. the environmental context

 

D. the dynamic context

 

22. The ‘circle of venture capital ecstasy’ and the ‘food chain for entrepreneurial ventures’ allow the entrepreneur to visualise how the company:

A. creates, builds, harvests, and invests

 

B. building, invests, creates

 

C. build, harvest, invest

 

D. build, grow, harvest, invest

 

23. What is a window of opportunity?

A. It is where an opportunity presents itself and remains open long enough to take it

 

B. It is where an opportunity opens a window that did not exist

 

C. It is where an opportunity is taken

 

D. It is where an opportunity exists

 

24. Social entrepreneurs start with:

A. no money

 

B. a social conscience

 

C. a good opportunity

 

D. an identified human or social needs that a community requires

 

25. What percentage of radical innovations since World War II ended (1945) have come from new and small firms, not giant firms?

A. 94 per cent

 

B. 95 per cent

 

C. 92 per cent

 

D. 93 per cent

 

26. Why do businesses lose 70 per cent of their customers?

A. Deficient products

 

B. Poor price

 

C. Poor customer service

 

D. Poor service

 

27. A good idea is in the hands of an entrepreneur is:

A. a tool

 

B. a biological reaction

 

C. a waste of time

 

D. None of the given answers

 

28. Recognising ideas that can become entrepreneurial opportunities stems from:

A. being in the right place at the right time

 

B. the capacity to see what others do not

 

C. the capacity to take decisive action

 

D. the capacity to know what action to take

 

29. A business that can identify a market niche for a product or service that meets an important customer need and provides high value-added or value created benefits to customers is a:

A. successful business

 

B. lower potential business

 

C. higher potential business

 

D. medium potential business

 

30. What is the best way to gain competitor intelligence?

A. From material obtained in ethical and unethical ways

 

B. Interviewing people and analysing data

 

C. Phony interviews, phony bid requests

 

D. All of the given answers

 

31. Which of the following documents is most analogous to a business plan of a high-potential venture?

A. A flowchart

 

B. A roadmap

 

C. An investment contract

 

D. A ‘How To’ manual

 

32. Success is a highly situational occurrence, depending on:

A. Timing

 

B. Stakeholders

 

C. Market

 

D. All of the given answers

 

33. Which minimum return on investment would a professional investor expect with a superior business opportunity?

A. 20 per cent

 

B. 25 per cent

 

C. 30 per cent

 

D. 50 per cent

 

34. Being opportunity-focused means never lose sight of what?

A. Competitive advantages

 

B. The customer and the marketplace

 

C. The economic and funding metrics of the venture

 

D. Distinctive competencies

 

35. What do Optus and Toll Transport have in common with regard to how those opportunities came about?

A. Early venture capital commitment

 

B. Regulatory changes

 

C. Entrepreneurial leadership

 

D. Fragmented industries

 

36. According to research, what is the primary reason companies lose customers?

A. Product quality issues

 

B. Competitive offers

 

C. Customer service issues

 

D. Changing needs

 

37. Moore’s Law is most closely associated with what concept of opportunity recognition?

A. Sea changes

 

B. Irrational exuberance

 

C. Value chain disruption

 

D. Venture investor criteria

 

38. Which of the following is a right-mode brain characteristic?

A. Verbal: Using words to name, describe, and define

 

B. Concrete: Relating to things as they are at the present moment

 

C. Rational: Drawing conclusions based on reason and facts

 

D. Linear: Thinking in terms of linked ideas

 

39. Windows of opportunity open:

A. As the market becomes established

 

B. As the market becomes large and structured

 

C. As the market matures

 

D. Depends on the opportunity

 

40. On which of the following do venture capitalists place the most weight when screening opportunities?

A. Patents and other competitive advantages

 

B. Management team

 

C. The economics of the venture

 

D. Strategic differentiation

 

41. Analysing market structure would include all of the following except:

A. Product differentiation

 

B. Demand sensitivity

 

C. Number of sellers

 

D. Payback to the customer

 

42. What annual growth rate is indicative of a thriving and expansive industry—one that offers opportunities for new entrants to create niches?

A. 5 to 10 per cent

 

B. 10 to 20 per cent

 

C. 20 to 40 per cent

 

D. Depends on the industry

 

43. Earnings before interest but after taxes (EBIAT) is driven by all the following except:

A. Liquidity

 

B. Profitability

 

C. Sales

 

D. Asset intensity

 

44. With regard to the capital markets, what is most critical in initial public offerings?

A. Audited documentation

 

B. Timing

 

C. Market adoption

 

D. The underwriter(s)

 

45. Attractive opportunities are ones that have potential for a moderate-to-strong degree of control over which of the following:

A. Barriers to entry

 

B. Exit mechanism

 

C. Channels of distribution

 

D. Strategic differentiation

 

46. Having a favourable window of opportunity is most closely related to:

A. Barriers to entry

 

B. Exit mechanism

 

C. Channels of distribution

 

D. Strategic differentiation

 

47. Which of the following has research shown to be the most important determinant of competitive success?

A. Customer service

 

B. Product differentiation

 

C. Flexibility

 

D. Payback to the customer

 

48. Which of the following would not be a good source for an entrepreneur seeking viable opportunities?

A. Patent brokers

 

B. Bankruptcy judges

 

C. Trust officers

 

D. All are good sources

 

49. With the exception of the real estate they may own for their business, small business owners rarely build much ________.

________________________________________

 

50. Superior opportunities solve a significant problem, remove a serious pain-point, or meet a significant want or need–for which someone is willing to pay a _________.

________________________________________

 

51. In order for an entrepreneur to estimate and communicate sustainable value to potential stakeholders, an opportunity should have a minimum market size of ________.

________________________________________

 

52. While an intense level of psychological ownership and involvement is certainly a prerequisite for creating a new business, the fatal flaw in attachment to an invention or product is a _________.

________________________________________

 

53. ________ is the process of linking knowledge in one field or marketplace with quite different technical, business, or market know-how from others.

________________________________________

 

54. Abstract thinking—taking out a small bit of information and using it to represent the whole thing—is associated with the ________side of the brain.

________________________________________

 

55. The viable time frame within which a venture can be developed is called the ________.

________________________________________

 

56. Price-cutting and other competitive strategies in highly concentrated markets can present a significant ________ for new entrants.

________________________________________

 

57. The attractiveness of an opportunity diminishes when the time to breakeven and achieve positive cash flow exceeds ________ years.

________________________________________

 

58. The context in which the sale or acquisition of a company occurs is largely driven by the ________ at that particular time.

________________________________________

 

59. The inability to achieve and sustain a position as a ________ producer shortens the life expectancy of a new venture.

________________________________________

 

60. The highly organic and situational nature of the entrepreneurial process underscores the criticality of determining fit and the balancing of what?

 

 

 

 

61. In the ‘Circle of Venture Capital Ecstasy’, what attracts the “best venture capitalists, board members, and other mentors and advisors” who can add value to the venture?

 

 

 

 

62. What minimum level of gross margin is characteristic of a superior opportunity?

 

 

 

 

63. What minimum level of after-tax profit potential do venture investors expect to see in a superior opportunity?

 

 

 

 

64. What minimum annual growth rate is characteristic of a high-potential venture opportunity?

 

 

 

 

65. With higher potential businesses, what is the potential payback to the user or customer of a given product or service through cost savings or other value-added or valued-created properties?

 

 

 

 

66. If an idea is not an opportunity, what is an opportunity?

 

 

 

 

67. If you are researching a new business what is the best way to obtain the information you need about your competitors?

 

 

 

 

 

 

5 Key

1.
(p. 164)
The fit of the lead entrepreneur and the management team with an opportunity is of the utmost importance.

TRUE

It is the entrepreneur and the management team which drive the opportunity, not the other way around. Hence it is crucially important that the people fit the opportunity in terms of experience, personality, ambitions and so on. Opportunities are simply that until a team of people transforms opportunities into reality.

 

Difficulty: Easy
Timmons – Chapter 05 #1
 

 

2.
(p. 150)
For owners of small businesses, extremely long hours of 70, 80, or even 100 hours a week, and rare vacations, are often the rule rather than the exception.

TRUE

 

Difficulty: Easy
Timmons – Chapter 05 #2
 

 

3.
(p. 150)
One of the big differences between the growth- and equity-minded entrepreneur and the traditional small business owners is that the entrepreneur is willing to use leverage financing.

FALSE

 

Difficulty: Easy
Timmons – Chapter 05 #3
 

 

4.
(p. 151)
The best and the brightest venture capitalists rarely miss a homerun opportunity when it is presented to them.

FALSE

 

Difficulty: Easy
Timmons – Chapter 05 #4
 

 

5.
(p. 151)
The best opportunities are focused enterprises; what you start out to do is what you end up doing.

FALSE

 

Difficulty: Easy
Timmons – Chapter 05 #5
 

 

6.
(p. 153)
The vast majority of startup entrepreneurs spend inordinate amounts of time chasing inappropriate funding sources for their venture.

TRUE

 

Difficulty: Easy
Timmons – Chapter 05 #6
 

 

7.
(p. 154)
The business environment in which an entrepreneur launches his or her venture cannot be altered significantly.

TRUE

 

Difficulty: Medium
Timmons – Chapter 05 #7
 

 

8.
(p. 154)
Social and nonprofit organisations do not need to be as concerned with positive cash flow since they operate in a different type of market than for-profit organisations.

FALSE

 

Difficulty: Medium
Timmons – Chapter 05 #8
 

 

9.
(p. 154)
In a free enterprise system, opportunities are held up and prevented by such factors as changing circumstances, chaos, confusion, inconsistencies, and information gaps.

FALSE

 

Difficulty: Easy
Timmons – Chapter 05 #9
 

 

10.
(p. 155)
The vast majority of radical innovation occurs in new and smaller firms.

TRUE

 

Difficulty: Easy
Timmons – Chapter 05 #10
 

 

11.
(p. 155)
Marketplaces dominated by large, multibillion-dollar players are impenetrable by smaller, entrepreneurial companies since they are unable to compete with entrenched, resource-rich, established companies.

FALSE

 

Difficulty: Easy
Timmons – Chapter 05 #11
 

 

12.
(p. 166)
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.

TRUE

 

Difficulty: Easy
Timmons – Chapter 05 #12
 

 

13.
(p. 171)
The impact on firm performance of industry structure is strongly mitigated by controllable factors such as the strategy selected for entry.

TRUE

 

Difficulty: Easy
Timmons – Chapter 05 #13
 

 

14.
(p. 172)
Asset-intensive, high-margin businesses generate the highest profits and sustainable growth.

FALSE

 

Difficulty: Medium
Timmons – Chapter 05 #14
 

 

15.
(p. 176)
To gain market entry with high-value-added products or services in a growing market, it is best to price slightly below competitors.

FALSE

 

Difficulty: Easy
Timmons – Chapter 05 #15
 

 

16.
(p. 178)
Data available about market characteristics, competitors, and the like are frequently inversely related to the real potential of an opportunity.

TRUE

 

Difficulty: Medium
Timmons – Chapter 05 #16
 

 

17.
(p. 150)
One of the key differences between the growth and equity-minded entrepreneur and the traditional small business owner is that the entrepreneur thinks:

A. strategically

 

B. optimistically

 

C. bigger

 

D. smarter

By thinking bigger there is a higher chance that an entrepreneur will start a high potential venture, whereas classic small business owners think atomistically, waiting to accumulate what is needed or not knowing where to go next or being limited by the type of opportunity they decide to take.

 

Difficulty: Easy
Timmons – Chapter 05 #17
 

 

18.
(p. 150)
The journey from idea to high potential opportunity is:

A. illusive, contradictory and perilous

 

B. contradictory, complex, and illusive

 

C. perilous, complex, and contradictory

 

D. None of the given answers

There is nothing straightforward about starting and succeeding with high potential opportunities. Often because it is a new idea which is leading to a new opportunity there may be problems in ‘selling’ the idea; the market may not be ready for the idea; there may not be sufficient funds to develop the idea and subsequent opportunity into a business; what might seem like a straightforward opportunity can be fraught with a multitude of problems.

 

Difficulty: Medium
Timmons – Chapter 05 #18
 

 

19.
(p. 150)
The 5 per cent of entrepreneurs that create high potential ventures reveal:

A. a process more related to a work of art than any rational type design

 

B. a process revolving around luck more than rationality

 

C. the use of a highly-detailed checklist

 

D. the use of a highly-developed business plan.

A work of art is constructed using a set of techniques, but it is the way in which the techniques are used and applied that differentiates the artist from the ordinary. Artists have a different way of viewing the world and seeing possibilities and in some ways this is what high potential venture entrepreneurs are: artists who see the world differently to most of us.

 

Difficulty: Medium
Timmons – Chapter 05 #19
 

 

20.
(p. 150-151)
The highly organic and situational character of the entrepreneurial process underscores the criticality of determining:

A. fit and balancing time and tide

 

B. risk, fit, and balance

 

C. fit and balancing risk and reward

 

D. balancing risk and reward

Unless the opportunity is a good fit with all the various critical elements to the entrepreneurial process and the risk and reward has been appropriately balanced, there is a high chance that a high potential venture will fail.

 

Difficulty: Medium
Timmons – Chapter 05 #20
 

 

21. What is one of the key aspects of the evolution of high potential ventures?

A. the benign context

 

B. the turbulent context

 

C. the environmental context

 

D. the dynamic context

One of the most important aspects of realising high potential ventures is the appreciation that they will exist in a dynamic context. This means that the context is constantly fluid and there are changes taking place as the result of such dynamism. It captures the extremely ever changing, ever evolving context with which a high potential entrepreneur needs to work.

 

Difficulty: Medium
Timmons – Chapter 05 #21
 

 

22.
(p. 151)
The ‘circle of venture capital ecstasy’ and the ‘food chain for entrepreneurial ventures’ allow the entrepreneur to visualise how the company:

A. creates, builds, harvests, and invests

 

B. building, invests, creates

 

C. build, harvest, invest

 

D. build, grow, harvest, invest

The concepts enable potential entrepreneurs to visualise how the process works in building an opportunity, getting sufficient investment to get the opportunity happening, and finally harvesting the results.

 

Difficulty: Easy
Timmons – Chapter 05 #22
 

 

23. What is a window of opportunity?

A. It is where an opportunity presents itself and remains open long enough to take it

 

B. It is where an opportunity opens a window that did not exist

 

C. It is where an opportunity is taken

 

D. It is where an opportunity exists

This is where the importance of understanding the dynamic nature of the context of entrepreneurial opportunities becomes important – due to the dynamic, ever-changing nature of the context within which high potential ideas are turned into opportunity, the time has to be such that as soon as a window of opportunity presents itself, the entrepreneur is in a position to immediately take advantage of it, as such a window of opportunity may not ever recur. Page 154

 

Difficulty: Easy
Timmons – Chapter 05 #23
 

 

24. Social entrepreneurs start with:

A. no money

 

B. a social conscience

 

C. a good opportunity

 

D. an identified human or social needs that a community requires

Social entrepreneurs are primarily concerned with improving the human condition without necessarily profiting from it to the same extent a more traditional entrepreneur might. And this tends to be the main difference between the two. While all types of entrepreneurship do eventually benefit the community (among others) social entrepreneurs start with the community as the primary beneficiary.

 

Difficulty: Easy
Timmons – Chapter 05 #24
 

 

25. What percentage of radical innovations since World War II ended (1945) have come from new and small firms, not giant firms?

A. 94 per cent

 

B. 95 per cent

 

C. 92 per cent

 

D. 93 per cent

Large firms are often too cumbersome and slow to allow for the necessary ‘space’ innovators might need. They are often unable to react with sufficient speed and can be too embedded in their existing products and processes to be bothered with encouraging the processes of innovation.

 

Difficulty: Easy
Timmons – Chapter 05 #25
 

 

26. Why do businesses lose 70 per cent of their customers?

A. Deficient products

 

B. Poor price

 

C. Poor customer service

 

D. Poor service

The marketplace is so highly competitive today that many firms secure a competitive advantage by placing customer service high on its list of priorities; not only placing it there in mission statements and so on but ensuring that it becomes a central part of the culture of the organisation. There are rare companies that can afford to ignore customer service (e.g. the banks and telcos in Australia due to a variety of reasons) but generally great customer service can be a necessity which keeps a firm a step ahead of competitors.

 

Difficulty: Easy
Timmons – Chapter 05 #26
 

 

27. A good idea is in the hands of an entrepreneur is:

A. a tool

 

B. a biological reaction

 

C. a waste of time

 

D. None of the given answers

A good idea is simply the first of many steps in the process of converting the creativity of an entrepreneur into an opportunity. Many people can have good, even great, ideas; it is being able to actually do something with these ideas that matter at an entrepreneurial level.

 

Difficulty: Easy
Timmons – Chapter 05 #27
 

 

28. Recognising ideas that can become entrepreneurial opportunities stems from:

A. being in the right place at the right time

 

B. the capacity to see what others do not

 

C. the capacity to take decisive action

 

D. the capacity to know what action to take

Being able to recognise an idea and then being able to shape that idea into an opportunity is one of the key features of being an entrepreneur. There can be lots of good ideas, but it is the taking of an idea and turning it into an opportunity which differentiates the entrepreneur from the ordinary.

 

Difficulty: Medium
Timmons – Chapter 05 #28
 

 

29.
(p. 169)
A business that can identify a market niche for a product or service that meets an important customer need and provides high value-added or value created benefits to customers is a:

A. successful business

 

B. lower potential business

 

C. higher potential business

 

D. medium potential business

Unless the specified conditions are met, the business cannot be by definition a higher potential business. If a business meets all these conditions then there is a very high chance that it will be able to be developed into a higher potential business; but this is not an automatic process, nor does it last indefinitely. It is something that has to be constantly worked at, as other entrepreneurs/established businesses will want to make that market share their own.

 

Difficulty: Easy
Timmons – Chapter 05 #29
 

 

30. What is the best way to gain competitor intelligence?

A. From material obtained in ethical and unethical ways

 

B. Interviewing people and analysing data

 

C. Phony interviews, phony bid requests

 

D. All of the given answers

What separates the different ways of obtaining competitive intelligence is the ethics of the individual/company that is seeking the information. None of the above methods are illegal, but some are ethical and others not. The entrepreneur gets to chose whether to act in ethical or unethical ways.

 

Difficulty: Hard
Timmons – Chapter 05 #30
 

 

31.
(p. 150)
Which of the following documents is most analogous to a business plan of a high-potential venture?

A. A flowchart

 

B. A roadmap

 

C. An investment contract

 

D. A ‘How To’ manual

 

Difficulty: Medium
Timmons – Chapter 05 #31
 

 

32.
(p. 151)
Success is a highly situational occurrence, depending on:

A. Timing

 

B. Stakeholders

 

C. Market

 

D. All of the given answers

 

Difficulty: Easy
Timmons – Chapter 05 #32
 

 

33.
(p. 153)
Which minimum return on investment would a professional investor expect with a superior business opportunity?

A. 20 per cent

 

B. 25 per cent

 

C. 30 per cent

 

D. 50 per cent

 

Difficulty: Medium
Timmons – Chapter 05 #33
 

 

34.
(p. 154)
Being opportunity-focused means never lose sight of what?

A. Competitive advantages

 

B. The customer and the marketplace

 

C. The economic and funding metrics of the venture

 

D. Distinctive competencies

 

Difficulty: Easy
Timmons – Chapter 05 #34
 

 

35.
(p. 155)
What do Optus and Toll Transport have in common with regard to how those opportunities came about?

A. Early venture capital commitment

 

B. Regulatory changes

 

C. Entrepreneurial leadership

 

D. Fragmented industries

 

Difficulty: Medium
Timmons – Chapter 05 #35
 

 

36.
(p. 155)
According to research, what is the primary reason companies lose customers?

A. Product quality issues

 

B. Competitive offers

 

C. Customer service issues

 

D. Changing needs

 

Difficulty: Easy
Timmons – Chapter 05 #36
 

 

37.
(p. 156)
Moore’s Law is most closely associated with what concept of opportunity recognition?

A. Sea changes

 

B. Irrational exuberance

 

C. Value chain disruption

 

D. Venture investor criteria

 

Difficulty: Easy
Timmons – Chapter 05 #37
 

 

38.
(p. 161)
Which of the following is a right-mode brain characteristic?

A. Verbal: Using words to name, describe, and define

 

B. Concrete: Relating to things as they are at the present moment

 

C. Rational: Drawing conclusions based on reason and facts

 

D. Linear: Thinking in terms of linked ideas

 

Difficulty: Medium
Timmons – Chapter 05 #38
 

 

39.
(p. 162-163)
Windows of opportunity open:

A. As the market becomes established

 

B. As the market becomes large and structured

 

C. As the market matures

 

D. Depends on the opportunity

 

Difficulty: Medium
Timmons – Chapter 05 #39
 

 

40.
(p. 164)
On which of the following do venture capitalists place the most weight when screening opportunities?

A. Patents and other competitive advantages

 

B. Management team

 

C. The economics of the venture

 

D. Strategic differentiation

 

Difficulty: Easy
Timmons – Chapter 05 #40
 

 

41.
(p. 169)
Analysing market structure would include all of the following except:

A. Product differentiation

 

B. Demand sensitivity

 

C. Number of sellers

 

D. Payback to the customer

 

Difficulty: Easy
Timmons – Chapter 05 #41
 

 

42.
(p. 170)
What annual growth rate is indicative of a thriving and expansive industry—one that offers opportunities for new entrants to create niches?

A. 5 to 10 per cent

 

B. 10 to 20 per cent

 

C. 20 to 40 per cent

 

D. Depends on the industry

 

Difficulty: Medium
Timmons – Chapter 05 #42
 

 

43.
(p. 172)
Earnings before interest but after taxes (EBIAT) is driven by all the following except:

A. Liquidity

 

B. Profitability

 

C. Sales

 

D. Asset intensity

 

Difficulty: Medium
Timmons – Chapter 05 #43
 

 

44.
(p. 173)
With regard to the capital markets, what is most critical in initial public offerings?

A. Audited documentation

 

B. Timing

 

C. Market adoption

 

D. The underwriter(s)

 

Difficulty: Easy
Timmons – Chapter 05 #44
 

 

45.
(p. 173)
Attractive opportunities are ones that have potential for a moderate-to-strong degree of control over which of the following:

A. Barriers to entry

 

B. Exit mechanism

 

C. Channels of distribution

 

D. Strategic differentiation

 

Difficulty: Medium
Timmons – Chapter 05 #45
 

 

46.
(p. 173)
Having a favourable window of opportunity is most closely related to:

A. Barriers to entry

 

B. Exit mechanism

 

C. Channels of distribution

 

D. Strategic differentiation

 

Difficulty: Easy
Timmons – Chapter 05 #46
 

 

47.
(p. 175)
Which of the following has research shown to be the most important determinant of competitive success?

A. Customer service

 

B. Product differentiation

 

C. Flexibility

 

D. Payback to the customer

 

Difficulty: Easy
Timmons – Chapter 05 #47
 

 

48.
(p. 176)
Which of the following would not be a good source for an entrepreneur seeking viable opportunities?

A. Patent brokers

 

B. Bankruptcy judges

 

C. Trust officers

 

D. All are good sources

 

Difficulty: Easy
Timmons – Chapter 05 #48
 

 

49.
(p. 150)
With the exception of the real estate they may own for their business, small business owners rarely build much ________.

equity

 

Difficulty: Easy
Timmons – Chapter 05 #49
 

 

50.
(p. 153)
Superior opportunities solve a significant problem, remove a serious pain-point, or meet a significant want or need–for which someone is willing to pay a _________.

premium

 

Difficulty: Easy
Timmons – Chapter 05 #50
 

 

51.
(p. 153)
In order for an entrepreneur to estimate and communicate sustainable value to potential stakeholders, an opportunity should have a minimum market size of ________.

$50 million

 

Difficulty: Medium
Timmons – Chapter 05 #51
 

 

52.
(p. 158-159)
While an intense level of psychological ownership and involvement is certainly a prerequisite for creating a new business, the fatal flaw in attachment to an invention or product is a _________.

narrow focus

 

Difficulty: Hard
Timmons – Chapter 05 #52
 

 

53.
(p. 160)
________ is the process of linking knowledge in one field or marketplace with quite different technical, business, or market know-how from others.

Pattern recognition

 

Difficulty: Medium
Timmons – Chapter 05 #53
 

 

54.
(p. 161)
Abstract thinking—taking out a small bit of information and using it to represent the whole thing—is associated with the ________side of the brain.

left

 

Difficulty: Medium
Timmons – Chapter 05 #54
 

 

55.
(p. 163)
The viable time frame within which a venture can be developed is called the ________.

window of opportunity

 

Difficulty: Easy
Timmons – Chapter 05 #55
 

 

56.
(p. 170)
Price-cutting and other competitive strategies in highly concentrated markets can present a significant ________ for new entrants.

barrier to entry

 

Difficulty: Medium
Timmons – Chapter 05 #56
 

 

57.
(p. 171)
The attractiveness of an opportunity diminishes when the time to breakeven and achieve positive cash flow exceeds ________ years.

three

 

Difficulty: Medium
Timmons – Chapter 05 #57
 

 

58.
(p. 173)
The context in which the sale or acquisition of a company occurs is largely driven by the ________ at that particular time.

capital markets

 

Difficulty: Easy
Timmons – Chapter 05 #58
 

 

59.
(p. 173)
The inability to achieve and sustain a position as a ________ producer shortens the life expectancy of a new venture.

low-cost

 

Difficulty: Easy
Timmons – Chapter 05 #59
 

 

60.
(p. 151)
The highly organic and situational nature of the entrepreneurial process underscores the criticality of determining fit and the balancing of what?

Risk and reward

 

Difficulty: Medium
Timmons – Chapter 05 #60
 

 

61.
(p. 151)
In the ‘Circle of Venture Capital Ecstasy’, what attracts the “best venture capitalists, board members, and other mentors and advisors” who can add value to the venture?

Speed and agility

 

Difficulty: Medium
Timmons – Chapter 05 #61
 

 

62.
(p. 153)
What minimum level of gross margin is characteristic of a superior opportunity?

30 per cent

 

Difficulty: Medium
Timmons – Chapter 05 #62
 

 

63.
(p. 153)
What minimum level of after-tax profit potential do venture investors expect to see in a superior opportunity?

10 per cent

 

Difficulty: Medium
Timmons – Chapter 05 #63
 

 

64.
(p. 170)
What minimum annual growth rate is characteristic of a high-potential venture opportunity?

20 per cent

 

Difficulty: Medium
Timmons – Chapter 05 #64
 

 

65.
(p. 169)
With higher potential businesses, what is the potential payback to the user or customer of a given product or service through cost savings or other value-added or valued-created properties?

One year or less

 

Difficulty: Medium
Timmons – Chapter 05 #65
 

 

66.
(p. 153)
If an idea is not an opportunity, what is an opportunity?

Opportunities create or add significant value to a customer or end-user. They do so by solving a significant problem, removing a serious pain-point, or meeting a significant want or need–for which someone is willing to pay a premium. Superior opportunities have robust market, margin, and moneymaking characteristics that will allow the entrepreneur to estimate and communicate sustainable value to potential stakeholders. They are a good fit with the founder(s) and the management team at the time and in the marketplace–and the exhibit an attractive risk-reward balance.

 

Difficulty: Hard
Timmons – Chapter 05 #66
 

 

67.
(p. 179)
If you are researching a new business what is the best way to obtain the information you need about your competitors?

The question is designed to get students to think about the role that ethics play in the entrepreneurial process. The collection of competitive (or potential) information can range from the legal (material in the public domain) through to illegal (bribing people) industrial espionage (which may or may not be illegal). The ultimate aim of the question is to get students to think about their own ethical positions in relation to actions and to what extent the ends justifies the means and whether the means are an end in themselves.

 

Difficulty: Medium
Timmons – Chapter 05 #67
 

 

 

5 Summary

Category # of Questions
Difficulty: Easy 35
Difficulty: Hard 3
Difficulty: Medium 29
Timmons – Chapter 05 67

 

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