Tuesday, 4 June 2019

The process of identifying, selecting, and developing new venture opportunities is known as _____________.


40.
According to the text, for an entrepreneurial start-up to be successful, three ingredients are critical. What are they? 
 

A. 
good ideas, a team of investors, and a business plan

B. 
a viable opportunity, available resources, and a qualified and motivated founding team

C. 
an opportunity, a marketing plan, and office space

D. 
management, marketing, and money
Beyond merely identifying a venture concept, the opportunity recognition process also involves organizing the key people and resources that are needed to go forward. The three factors that are needed, therefore, to successfully proceed are opportunity, resources, and entrepreneur(s).


AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

41.
Which of the following is not a common source of new business opportunities? 
 

A. 
current or past work experiences

B. 
suggestions by family or friends

C. 
chance event

D. 
future work
For new business start-ups, opportunities come from many sources including current or past work experiences, hobbies that grow into businesses or lead to inventions, suggestions by friends or family, or a chance event that makes an entrepreneur aware of an unmet need.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

42.
The process of identifying, selecting, and developing new venture opportunities is known as _____________. 
 

A. 
innovativeness

B. 
bootstrapping

C. 
opportunity recognition

D. 
brainstorming
To determine which ideas are strong enough to become new ventures, entrepreneurs must go through a process of identifying, selecting, and developing potential opportunities. This is the process of opportunity recognition.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

43.
Generally speaking, the opportunity recognition process consists of two phases of activity. They are ______________ and _____________. 
 

A. 
global search; recycling profits

B. 
value creation; affordability

C. 
discovery; evaluation

D. 
global search; valuation
Opportunity recognition refers to more than just the Eureka feeling that people sometimes experience at the moment they identify a new idea. Although such insights are often very important, the opportunity recognition process involves two phases of activity (discovery and evaluation), which lead to viable new venture opportunities.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

44.
Which of the following is NOT one of the characteristics of an entrepreneurial opportunity? 
 

A. 
attractive

B. 
affordable

C. 
achievable

D. 
value creating
For an opportunity to be viable, it needs to have four qualities: attractive, achievable, durable, and value creating.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

45.
When an opportunity is attractive long enough for it to be successfully developed and deployed, it is said to be _____________. 
 

A. 
value creating

B. 
affordable

C. 
achievable

D. 
durable
For an opportunity to be viable, it needs to have four qualities, one of which is durable. This means the opportunity must be attractive long enough for the development and deployment to be successful; that is, the window of opportunity must be open long enough for it to be worthwhile.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

46.
Which of the following terms is used to refer to opportunities that are practical and physically possible? 
 

A. 
durable

B. 
valuable

C. 
achievable

D. 
sustainable
For an opportunity to be viable, it needs to have four qualities, one of which is achievable. This means the opportunity must be practical and physically possible.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

47.
Which of the following is not a primary source of financing for entrepreneurial start-ups? 
 

A. 
investments by family and friends

B. 
personal savings

C. 
private investors

D. 
public equity
The majority of new firms are low-budget start-ups launched with personal savings and the contributions of family and friends. Angel investors, private individuals who provide equity investments for seed capital during the early stages of a new venture, favor companies that already have a winning business model and dominance in a market niche.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

48.
According to a study by the Kaufmann Foundation, which of the following is the largest source of funding for businesses that have been operating at least five years? 
 

A. 
loans

B. 
venture capital

C. 
public financing

D. 
angel financing
According to the Kauffman Foundation study, after five years of operation, the largest source of funding is from loans taken out by the business.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

49.
The majority of entrepreneurial start-ups are financed through monies from _____________. 
 

A. 
bank financing

B. 
SBA loans

C. 
venture-capital financing

D. 
personal savings and the contributions of family and friends
The majority of new firms are low-budget start-ups launched with personal savings and the contributions of family and friends.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

50.
Private individuals who provide seed capital to young ventures are known as _____________. 
 

A. 
angels

B. 
gazelles

C. 
cash cows

D. 
rising stars
Angel investors, private individuals who provide equity investments for seed capital during the early stages of a new venture, favor companies that already have a winning business model and dominance in a market niche.

AACSB: Analytic
Blooms: Remember
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 1 Easy
Topic: Recognizing Entrepreneurial Opportunities
 

51.
Which of the following statements about venture capital is not true? 
 

A. 
Entrepreneurs raise venture capital by selling shares of ownership in their business.

B. 
Venture capital is a form of public equity financing.

C. 
Venture capital is used to finance rapid growth or large capital expenditures.

D. 
Venture capital groups can often provide helpful management advice.
Start-ups that involve large capital investments or extensive development costs may seek venture capital, a form of private equity financing through which entrepreneurs raise money by selling shares in the new venture. Venture capitalists nearly always have high performance expectations from the companies they invest in, but they also provide important managerial advice and links to key contacts in an industry.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

52.
Based on statistics reported in the text, which of the following statements is not true? 
 

A. 
Firms that obtain venture-capital funding receive an average of over $1 million each.

B. 
Total investment in start-up firms averages about $80,000 in the first year of the activity of the firm.

C. 
Among the 100 fastest-growing new businesses identified by Entrepreneur magazine, 61 percent obtained start-up funding from personal savings.

D. 
Ninety percent of the companies financed with venture capital funds fail.
Among firms included in the Entrepreneur Magazine list of the 100 fastest-growing new businesses in a recent year, 61 percent reported that their start-up funds came from personal savings. When firms receive venture-capital investments, they receive a substantial level of investment, over $1 million on average in the Kaufmann Foundation survey.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

53.
According to the text, new ventures launched by entrepreneurial teams are more likely to be successful than ventures launched by _____________. 
 

A. 
established corporations

B. 
bootstrappers

C. 
lone wolf entrepreneurs

D. 
individual investors
Managers need to have a strong base of experience, extensive domain knowledge, and an ability to make rapid decisions and change direction as needed. In the case of start-ups, more is better. New ventures that are started by teams of three, four, or five entrepreneurs are more likely to succeed in the long run than are ventures launched by lone wolf entrepreneurs.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

54.
Which of the following is the most important resource for a start-up activity? 
 

A. 
social recognition

B. 
land

C. 
personnel

D. 
money
Resources are an essential component of a successful entrepreneurial launch. For start-ups, the most important resource is usually money because a new firm typically has to expend substantial sums just to start the business. However, financial resources are not the only kind of resource a new venture needs. Human capital and social capital are also important.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

55.
______________ provide(s) a key avenue for growth for many young and small firms through partnering to obtain resources and/or expand into new markets. 
 

A. 
Strategic alliances

B. 
Bootstrappers

C. 
Lone wolf entrepreneurs

D. 
Research & development
Strategic alliances provide a key avenue for growth by entrepreneurial firms. By partnering with other companies, young or small firms can expand or give the appearance of entering numerous markets and/or handling a range of operations.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

56.
The U.S. Small Business Administration supports small business through all of the following EXCEPT 
 

A. 
government contracting.

B. 
underwriting loans.

C. 
investing venture capital.

D. 
training and counseling.
In the U.S., the federal government provides support for entrepreneurial firms in two key arenas, financing and government contracting. The Small Business Administration (SBA) has several loan guarantee programs designed to support the growth and development of entrepreneurial firms. The government itself does not typically lend money but underwrites loans made by banks to small businesses. The SBA also offers training, counseling, and support services through its local offices and Small Business Development Centers.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

57.
Which of the following is NOT one of the three characteristics of entrepreneurial leadership mentioned by the text? 
 

A. 
vision

B. 
dedication and drive

C. 
commitment to excellence

D. 
clarifying job responsibilities
Entrepreneurs put themselves to the test and get their satisfaction from acting independently, overcoming obstacles, and thriving financially. To do so, they must embody three characteristics of leadership: vision, dedication and drive, and commitment to excellence.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

58.
Vision is an important element of entrepreneurial leadership because _____________. 
 

A. 
the entrepreneur has to envision realities that do not yet exist

B. 
a vision statement must be part of the documentation used to obtain venture financing

C. 
organizations cannot function without a detailed and operational vision

D. 
banking institutions require it
Vision may be the most important asset of an entrepreneur. Entrepreneurs envision realities that do not yet exist. Without a vision, most entrepreneurs would never even get their venture off the ground.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-01 The role of opportunities; resources; and entrepreneurs in successfully pursuing new ventures.
Level of Difficulty: 2 Medium
Topic: Recognizing Entrepreneurial Opportunities
 

59.
Which of the following is NOT a common new entry strategy according to the text? 
 

A. 
imitative new entry

B. 
adaptive new entry

C. 
proactive new entry

D. 
pioneering new entry
For a new venture, the entry strategy will vary depending on how risky and innovative the new business concept is. New entry strategies typically fall into one of three categories: pioneering new entry, imitative new entry, or adaptive new entry.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-02 Three types of entry strategies-pioneering; imitative; and adaptive-commonly used to launch a new venture.
Level of Difficulty: 2 Medium
Topic: Entrepreneurial Strategy
 

60.
Seeking products or services that have been successful in one market and introducing the same basic product or service in another segment of the market is referred to as _____________. 
 

A. 
imitative new entry

B. 
adaptive new entry

C. 
proactive new entry

D. 
pioneering new entry
Imitators look for opportunities to capitalize on proven market successes. An imitative new entry strategy is used by entrepreneurs who see products or business concepts that have been successful in one market niche or physical locale and introduce the same basic product or service in another segment of the market.

AACSB: Analytic
Blooms: Understand
Learning Objective: 08-02 Three types of entry strategies-pioneering; imitative; and adaptive-commonly used to launch a new venture.
Level of Difficulty: 2 Medium
Topic: Entrepreneurial Strategy
 

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