FSE 301, Final Exam study guide
FSE 301, Final Exam study guide FSE 301
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This 15 page Study Guide was uploaded by Dan Notetaker on Saturday April 23, 2016. The Study Guide belongs to FSE 301 at Arizona State University taught by Elie Chmouni in Spring 2016. Since its upload, it has received 310 views. For similar materials see Entrepreneur & Value Creation in Engineering and Tech at Arizona State University.
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Date Created: 04/23/16
What are the negatives of being an entrepreneur Answers: Not Structured Not organized Lack of financial stability Shorter working hours Choose the advantages of being an entrepreneur from the list below Answers: Ability to think big Financial stability Do what you enjoy Freedom On average how many hours does a self employed person work every week Answers: 20-30 30-40 40-50 50-60 60-70 No stop work, 24/7 Does not work. Like a boss In this class, my goal is to make everyone an entrepreneur Answers: True False Entrepreneurship does not have to be high risk Answers: True False Research completed in 2009 determined that the average age of a successful entrepreneur in highgrowth industries such as computers, health care and aerospace is Answers: 25 40 46 30 What company started the Antenna Balls? Answers: Wal mart Jack in the Box Zappos Honda Who invested in the Green Fresh Patch pitch? Answers: Kevin O'leary Barbara Corcoran Lori Greiner Robert Herjavec Mark Cuban Which of the following are good strategies for coming up with new ideas? Answers: Search for a Better Way Get Inspired by History Head Into the Weird Places Attack Practical Problems Let Your Subconscious Do the Work All the above Perhaps the greatest factor that determines whether or not an entrepreneur will be successful isn't the business idea itself, but rather Answe availability of a lot of funding to push the idea forward rs: lack of competition from the market having great team member and co-founders the entrepreneur's willingness to try (and keep trying) to turn the idea into reality. A good strategy/method to use is when trying to identify the problems of your startup Answers: The CCC method The 5 why method The Triple S challenge The Quinzy Problem Finder method Understanding your customers should only be done in the intial stages. Once the customer is identified then you stop doing market research. Answers: True False Entrepreneurs's passion is a great indication of the quality of the idea Answers: True False The market research process can be placed in 6 steps. Order them in the right flow. Answers 1. Identify the research purpose 2. Collect data from the market 3. Evaluate already collected data 4. Analyse already collected and evaluated data 5. Interepret the analysed data 6. Disseminate the final product from market research to all decision makers in your company Which of the following is not a question you need to answer when doing market research? Answer Who are target customers for your company? s: How often those customers will purchase specific products or services? How much they are willing to pay for that products and services to you? How much does it cost to run your marketing campaign? What is the price of the specific product or services that your competitors offer on the market? Select the possible sources of information for market research Answers: Current customers Magazines and journals Surveys Internet Order the following according to the 7 Steps to Launch your Idea Answers 1. Don’t keep it to yourself 2. Seek the devil’s advocate 3. Build a product that you would use 4. Test your idea 5. Start thinking about revenue models 6. Create a landing page (connection point) 7. Find your first clients and get out to market Which of the following is not part of the product development stages? Answers: Problem/Solution Fit Product/Market Fit Revenue Generation Scale and Growth A good example of product market fit given was: Answers: Facebook Instagram Airbnb Uber The slide deck outline included 11 main categories. Which one is missing? Elevator Pitch Momentum, Traction, Expertise: Your key numbers Market Opportunity: Define market size & your customer base Problem & Current Solutions: What need do you fill? Other solutions ????? Business Model: Key Revenue Streams Market Approach & Strategy: How you grow your business Team & Key Stakeholders (Investors, Advisors) Financials 10. Competition 11. Investment: Your ‘Ask’ for funding, Basic use of funds Selected Answer: Product and service (your solution) What is a pitch deck for? Select all that apply Answers To give enough information to grab their interest, but not too much as to : overwhelm them To answer all possible questions, and close immediate investment Give them enough to get excited about, but leave them wanting more To tell a story in a visual sense with at least 25 slides When the Dollar Shave Club video was launched what happened Answers: The website and servers crashed from extensive orders and demand Nothing really, it went undetected for 3 weeks The video had to be re-editted because of an audio error They hired a logistics person to manage the orders Which of the following represent common deck mistakes? Answers: Too many slides, too much information False/silly assumptions you can’t back up or don’t have data on Creating a story Belittling competitors Which of the following represented a bad business pitch? Answers: Dollar Shave Club The Knowledge Crowdfunder Share the Air Dollar Shave Club's CEO has background in comedy and theater Selected Answer: True The Go Greek Yogurt pitch deck was great but what was missing? Answers: Financial Projections Overview of the team Their distribution and strategy Nothing was missing Why was The Knowledge pitch a bad one? Answers: The presenter did not know how to answer questions The product he was presenting did not work during the demo He talked too much about the financial projections He made really bad assumptions On your pitch deck, the goal of the Team slide is to Answers: Highlight key team members and their prior positions, successes, domain expertise Demonstrate relevant experience Show the size of your team Which roles are the keys to success in your company/space? Too many financial details for an investor deck is considered a deck mistake Selected Answer: True How many legal business entities were discussed in the lecture? (excluding non-profits) Selected Answer: 5 After your form and publish your LLC you must obtain a number from the IRS. What is that number called? Selected Answer: EIN What to Include in Your Operating Agreement? the members' percentage interests in the LLC the members' rights and responsibilities the members' voting powers how profits and losses will be allocated description of the owner personal assets and liabilities rules for holding meetings and taking votes Choose all that apply regarding a Sole Proprietorships Answers: Owner remains personally liable for lawsuits filed against the business. No state filing required to form a sole proprietorship. Easy to form and operate. Owner reports business profit and loss on their business tax return. What is a vesting schedule in an operating agreement? Answer Basically allow you to “trial” a hire or partnership without an immediate equity s: committment. Instead of each getting our shares % immediately, it gets given to us regularly over some period The process by which an employee accrues non-forfeitable rights over employer- provided stock incentives or employer contributions made to the employee's qualified retirement plan account or pension plan. The owners of an LLC ordinarily make financial contributions of cash, property, or services to the business to get it started. In return, each LLC member gets a percentage of ownership in the assets of the LLC. How much does it cost to file an expedited LLC Articles of Organization to the ACC? Selected Answer: $85 Which is true about an Operating Agreement Answer Every LLC is required to have an operating agreement s: An LLC operating agreement expires at the end of the fiscal year and needs to be renewed An operating agreement allows you to structure your financial and working relationships with your co-owners in a way that suits yourbusiness. An operating agreement must be filed with the state to be valid The benefits of an LLC include (choose all that apply) Answers: Independent legal structures separate from their owners. Ability to issue stocks and accounts Help separate your personal assets from your business debts. Not required to hold annual meetings or record minutes. What does LLC stand for? Limited Liability Company Which of the following represents the three big ideas about branding beyond beautiful. Answers: Rise Above Commoditization Develop a color pallette and design Answer the one big question Tell a great story For the big idea #1: Ride Above Commoditization which of the following apply? Answers: Define all audiences, investors, markets and media Do not bore anyone into buying your product Pick a color, graphic style, imagery Differentiate your products and your communications An example of design with good empathy is... (based on the lecture) Answers: Dish Network DVR Tivo Remote Control Starbucks Cups A brand is what you say it is, and what others feel, think, say about you. Selected Answer: False Place these in the proper order Answers 1. Study 2. Empathize 3. Prototype A great design is where user goals meet ... Answers: Investor goals Business goals Marketing goals None of the above When designing you should consider the following. Order from highest importance to lowest importance Answers 1. Functionality 2. Intuitiveness 3. Efficiency 4. Comfort 5. Delight An example of downstream audience is... Answers: End-user Investors Suppliers Financial Markets An example of upstream audience members is... Answers: Retailers purchasers Media Retailers Design is making things look pretty. Selected Answer: False What are the three main financial statements? Answers: Balance Sheet Break Even Sheet Profit and Loss Statement Cash Flow Statement When you have an idea or prototype, you can raise money from... Answers: SEED IPO Friends and Family SERIES A Which of the following show the correct process of financial management Selected Answer: All below: Preparation of historic and fincancial Statements 2. Preparation of Forcasts 3. Preparation of Pro Forma Financial Statements 4. Ongoing analysis of financial results Which of the following is true? Answers: Profit= Revenue - taxes Revenue= Profit + Expenses Expenses= Revenue + Profit Profit= Expenses - Revenue If the pre-money valuation of a company was $10 million and an investor is interested in investing $3 million. How much dilution does the founder take after the round of funding if he was 100% owner? Selected Answer: 23% Formula: $3 invest / (10 pre + 3 invest (aka post)) = 23% dilute If the pre-money valuation of a company was $8 million and an investor is interested in investing $1 million. How much equity would the investor own in the company after the round of funding? Selected Answer: 11.1% Formula: 1 / (1 + 9) = 11.1% equity When dealing with profit and loss (PNL) analysis which of the following is true? Answers: Gross profit = Sales - Costs of Goods Sold Net Profit = Sales - Expenses - Taxes Gross Profit + Operating Expenses = Net Profit EBT + EBIT = Gross Profit Which of the following sequences is true in terms of the Primary Financial Objectives? Selected Answer: Profitability, Liquidity, Effeciency, Stability A financial Statement is a written report that... Answers: reflect past performance and are usually prepared on a quarterly and annual basis. describes a firm’s financial health estimates the firm’s future income and expenses creates an itemized forecasts of a company’s income, expenses, and capital Which of the following represents some of your operational costs Answers: Raw materials and equipment Marketing and advertising costs Taxes Wages Loan repayment Premises (Rental or Mortgage) Utility bills –gas, electric, telephone, postage etc The "need to sell enough product to cover costs" represents Answers: Financial projections Break even point Efficiency production Net profit What are the main goals of the financial sheets you send the investors? Answers: Understanding how costs and sales relate to each other. Give an exact overview of how much money will be made over the next years. Provide a series of assumptions for your financial projections Allow the investor to understand your exit strategy When preparing a pitch deck make sure to include ... Selected Answers: What problem are you trying to solve? What is the size of the market? What is the market of your product? What is your solution? Who is your team? What is special about your product? What are the types of risks investors worry about? Answers: Team Price or cost Distribution Market What is equity financing? Answer In exchange for money, investors recieve an interest rate based on their funding s: level It is equivalent to a convertible note but on the east coast In exchange for money, share of the company are sold to investors. In exchange for money, investors receive a conversion rate for the future value of the company If you need funding for your initial stage, you should be going after... Answers: Angel investors VC Firms Friends and Family Your teacher When you are raising money you need to... Answers: Raise enough money to get you to the milestones you need to hit Raise more money than you think you need to hit those milestones Avoid large dilution and ask for chunks of small money rounds Plan for about 2-3 rounds of upcoming funding When talking to investors you are selling... Answers: Your dream and vision Your product The pitch deck The financial projections When pitching an investor, remember to ... Answers: Sell the dream Listen to what they ask Lead the conversation Let them know why they are a perfect match for you Have the slides from your pitch deck running in the background Have a lead investor How much return are investors looking for? Answers: 5x-7x 8x-10x 11x-12x 25x What is the maturity date? Answer The date when the company has sold enough products to raise funding. s: The date by which investors can force a company to convert their shares in the company The date by which investors can force a company to pay back debt if the company is not aquired The date by which the company is ready to raise another round of funding at a higher valuation
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