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Exam 12: Informal Risk Capital, Venture Capital, and Going Public

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Question 31

Multiple Choice

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Under the ________,reporting requirements are increased and due dates of reports to the SEC are accelerated.

A) Sarbanes-Oxley Act
B) Blue sky laws
C) Securities Regulation Act
D) Social Security Act

E) None of the above
F) A) and B)

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Question 32

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There are only two types of crowdfunding: reward-based and equity crowdfunding.

A) True
B) False

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Question 33

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A publicly traded company needs to disclose to the public all material information regarding the company,its operations,and its management.

Which of the following is not part of the private equity market

Two major disadvantages of going public are the increased reporting requirements and potential loss of control.

The waiting period is the time between:

Only individuals may invest in venture-capital limited partnerships.

Describe and compare early-stage financing to expansion or development financing.Who are the usual investors in each of the two stages

Early-stage financing is usually the least costly type of financing to obtain.

Most angel investors are individuals who accumulated their wealth through inheritance.

The quiet period is a 90-day period in going public when company information that will help increase stock price should and can be released.

In order to increase their chances for success,an entrepreneur should approach all possible venture capital firms with proposals.

There is more risk involved in financing a business's early operations,therefore,higher rates of return are expected.

The ________ is used to measure the short-term solvency of a venture.

The valuation approach that gives the lowest value of the business is:

The private equity market is composed of individuals,venture capital firms and private equity funds.

The largest amount of venture-capital money raised was for later-stage and expansion-stage investments.

Dividing net profit by total assets shows a firm's:

The longest stage of the venture capital process,at one to three months,is:

Identify and briefly describe,in order,each of the four major stages of the venture capital process.