MGMT 310 Final Exam || A+ Graded Already.
What comprises a new-venture team? correct answers the group of founders, key employees, and
advisers that move a new venture from an idea to a fully functioning firm
What is "liability of newness"? correct answers It refers to the fact that new companies often
falter because the people involved can't adjust fast enough to their new roles and because the
firm lacks a track record of success
The founders - Founding team correct answers In the early days of a firm, the founders'
knowledge, skills, and experiences are the most valuable resource the firm has
The founders - Qualities and preferred attributes correct answers Important entrepreneurial skills
are enhanced through higher education, Prior entrepreneurial experience, Founders with industry
experience, Founders with broad social and professional networks
The management team and key employees
- Sources of labor correct answers Full-or Part-time Employee, interns, Freelancer (or
contractor), virtual assistant
Skills profile chart correct answers is a chart that depicts the most important skills that are
needed and where skills gaps exist in a new firm
The board of directors - Purpose of the board correct answers A panel of individuals who are
elected by a corporation's share-holders to oversee the management of the firm
Type of Board Directors correct answers An inside director is a person who is also an officer of
the firm
An outside director is someone who is not employed by the firm
Formal responsibilities of board directors correct answers A board of directors has three formal
responsibilities: appoint the firm's officers, declare dividends, and oversee the affairs of the
organization
Role and function of boards of directors correct answers The board's most useful role is to
provide expert guidance and support to the firm's managers
Another function of a board of directors is to lend legitimacy to a firm
The board of advisors
- Purpose and role of the board correct answers A panel of experts who are asked by a firm's
managers to provide counsel and advice on an ongoing basis
The main purpose of a board of advisors is to provide guidance and lend legitimacy to a firm
Advisors vs. Board of Directors correct answers Entrepreneurial firms typically PAY the
members of their board of advisors a small honorarium for their service
, Lenders and investors
What is their relationship with new ventures correct answers Lenders and investors have a vested
interest in the companies they finance, often causing these individuals to become very involved
in helping the firms they fund
How lenders and investors can add value correct answers Help identify and recruit key
management personnel, Provide insight into the industry and markets in which the venture
intends to participate, Help the venture fine-tune its business model, Serve as a sounding board
for new ideas, Provide introductions to additional sources of capital, Recruit customers, Help to
arrange business partnerships
Other Professionals
Consultants correct answers - Individuals who give professional or expert advice.
- Paid consultants: includes large international consulting firms, such as Deloitte Management
Consulting
- Consultants are also available for free or at a reduced rate through a nonprofit or governmental
agency, such as SCORE
What is financial management? correct answers Financial management deals with two things:
raising money and managing a company's finances in a way that achieves the highest rate of
return
Four main financial objectives of a firm correct answers Profitability: A firm's ability to earn a
profit
Liquidity: A firm's ability to meet its short-term financial obligations
Efficiency: How productively a firm utilizes its assets relative to its revenue and its profits
Stability (solvency): Overall health of the firm's financial structure
What is the use of financial statements? correct answers A written reports that quantitatively
describe a firm's financial health
Income Statement correct answers Tells a firm how much money it is making or losing (the
results of the operation) during a specific period of time (quarterly, annually)
Accounts/information:
Net Sales, COGS, Operating expenses, Secondary expenses, Net Income = Total Revenue - Total
Costs and Expenses
Balance Sheet correct answers Reports a company's assets, liabilities and shareholders' equity at
a specific point in time (Dec/31)
Accounts/information:
Assets, Current Assets, Fixed assets, other assets, accumulated depreciation
Liabilities and Equity, current/long-term liability, owner's equity
Statement of Cash Flows correct answers Summarizes the changes in an organization's cash
position (where the cash is coming from and going to) for a specific period of time
Accounts/information:
What comprises a new-venture team? correct answers the group of founders, key employees, and
advisers that move a new venture from an idea to a fully functioning firm
What is "liability of newness"? correct answers It refers to the fact that new companies often
falter because the people involved can't adjust fast enough to their new roles and because the
firm lacks a track record of success
The founders - Founding team correct answers In the early days of a firm, the founders'
knowledge, skills, and experiences are the most valuable resource the firm has
The founders - Qualities and preferred attributes correct answers Important entrepreneurial skills
are enhanced through higher education, Prior entrepreneurial experience, Founders with industry
experience, Founders with broad social and professional networks
The management team and key employees
- Sources of labor correct answers Full-or Part-time Employee, interns, Freelancer (or
contractor), virtual assistant
Skills profile chart correct answers is a chart that depicts the most important skills that are
needed and where skills gaps exist in a new firm
The board of directors - Purpose of the board correct answers A panel of individuals who are
elected by a corporation's share-holders to oversee the management of the firm
Type of Board Directors correct answers An inside director is a person who is also an officer of
the firm
An outside director is someone who is not employed by the firm
Formal responsibilities of board directors correct answers A board of directors has three formal
responsibilities: appoint the firm's officers, declare dividends, and oversee the affairs of the
organization
Role and function of boards of directors correct answers The board's most useful role is to
provide expert guidance and support to the firm's managers
Another function of a board of directors is to lend legitimacy to a firm
The board of advisors
- Purpose and role of the board correct answers A panel of experts who are asked by a firm's
managers to provide counsel and advice on an ongoing basis
The main purpose of a board of advisors is to provide guidance and lend legitimacy to a firm
Advisors vs. Board of Directors correct answers Entrepreneurial firms typically PAY the
members of their board of advisors a small honorarium for their service
, Lenders and investors
What is their relationship with new ventures correct answers Lenders and investors have a vested
interest in the companies they finance, often causing these individuals to become very involved
in helping the firms they fund
How lenders and investors can add value correct answers Help identify and recruit key
management personnel, Provide insight into the industry and markets in which the venture
intends to participate, Help the venture fine-tune its business model, Serve as a sounding board
for new ideas, Provide introductions to additional sources of capital, Recruit customers, Help to
arrange business partnerships
Other Professionals
Consultants correct answers - Individuals who give professional or expert advice.
- Paid consultants: includes large international consulting firms, such as Deloitte Management
Consulting
- Consultants are also available for free or at a reduced rate through a nonprofit or governmental
agency, such as SCORE
What is financial management? correct answers Financial management deals with two things:
raising money and managing a company's finances in a way that achieves the highest rate of
return
Four main financial objectives of a firm correct answers Profitability: A firm's ability to earn a
profit
Liquidity: A firm's ability to meet its short-term financial obligations
Efficiency: How productively a firm utilizes its assets relative to its revenue and its profits
Stability (solvency): Overall health of the firm's financial structure
What is the use of financial statements? correct answers A written reports that quantitatively
describe a firm's financial health
Income Statement correct answers Tells a firm how much money it is making or losing (the
results of the operation) during a specific period of time (quarterly, annually)
Accounts/information:
Net Sales, COGS, Operating expenses, Secondary expenses, Net Income = Total Revenue - Total
Costs and Expenses
Balance Sheet correct answers Reports a company's assets, liabilities and shareholders' equity at
a specific point in time (Dec/31)
Accounts/information:
Assets, Current Assets, Fixed assets, other assets, accumulated depreciation
Liabilities and Equity, current/long-term liability, owner's equity
Statement of Cash Flows correct answers Summarizes the changes in an organization's cash
position (where the cash is coming from and going to) for a specific period of time
Accounts/information:
