©SIRJOEL EXAM SOLUTIONS
10/11/2024 1:41 PM
Final Exam Review Questions 100% Solved.
When hiring a third party service provider, which of these are important things to establish
before beginning any work? - answer✔Establish active lines of communication
Intellectual property rights and uses (who owns the work once it is all completed)
Pricing and timeline, along with expected tasks to be completed (scope of work
When hiring a freelancer, it is important to protect your valuable intellectual property because
_______. - answer✔They may copy or steal your proprietary information.
Grants are usually given as "Awards" or "Gifts" and do not have to be paid back to the issuer
ever. - answer✔True
This type of funding usually requires some sort of collateral or proof of income in order to be
considered. - answer✔Debt
How many companies actually receive capital from outside investors, such as angel funds or
venture capitalists? - answer✔Less than 5%
Which of these is usually not a reason that you would consider using outsourcing for your
business? - answer✔To find new investors
, ©SIRJOEL EXAM SOLUTIONS
10/11/2024 1:41 PM
Which of these is considered a disadvantage of using equity to finance a business? -
answer✔You have to give up a portion of existing ownership (dilution), which may ultimately be
worth much more in the future
Which of these is a disadvantage of debt? - answer✔You have to pay back debt with interest. If it
is a high rate or compounds frequently, it could result in significant interest expense over the life
of a debt.
Which of these is not a benefit of a priced round or offering (meaning the investor and company
agreed to a specific price per share of equity sold to the investor at the time of investment)? -
answer✔Requires significant negotiation and legal documentation, more time.
Which of these is not an advantage to using a convertible note (meaning the company and
investor will agree to broader terms, but equity will not be issued to the investor until the
company raises a priced round in the future or the note reached maturity)? - answer✔There are
terms, but it is difficult to understand what was received for the investment until it is converted
to equity in the future.
What is crowdfunding? If you were to use this strategy, what steps would be important to a
successful crowdfunding campaign?
Briefly, what is the primary difference between equity crowdfunding in comparison to
"traditional" crowdfunding? - answer✔Sourcing funds from the public, either through donations
, ©SIRJOEL EXAM SOLUTIONS
10/11/2024 1:41 PM
or pre-orders, or by offering specialized opportunities (sponsorship/naming rights/temporary
roles/limited edition items or apparel/long-term discounts).
Equity crowdfunding is a much more modern approach that allows investors to participate in
early stage opportunities, even if they are non-accredited investors.
What is an accredited investor? Who regulates that investors need to be accredited (federal
agency) in order to participate in riskier investments?
Briefly describe. List three of the ways someone would qualify as an accredited investor. -
answer✔SEC regulates.
Net worth over $1M not including primary residence.
Income of 200k or more as an individual; 300k with spouse and expectations of same income the
coming years.
Others - company worth over $5M or entity that is composed of only accredited investors.
Why might a company and investor agree to using a convertible note or SAFE agreement instead
of a priced offering for equity?
What are the benefits and risks of using these alternative investment agreements? -
answer✔Because it offers more protections and would a lot for more specific terms, allowing the
investor a more specific opportunity for future investments or returns.
10/11/2024 1:41 PM
Final Exam Review Questions 100% Solved.
When hiring a third party service provider, which of these are important things to establish
before beginning any work? - answer✔Establish active lines of communication
Intellectual property rights and uses (who owns the work once it is all completed)
Pricing and timeline, along with expected tasks to be completed (scope of work
When hiring a freelancer, it is important to protect your valuable intellectual property because
_______. - answer✔They may copy or steal your proprietary information.
Grants are usually given as "Awards" or "Gifts" and do not have to be paid back to the issuer
ever. - answer✔True
This type of funding usually requires some sort of collateral or proof of income in order to be
considered. - answer✔Debt
How many companies actually receive capital from outside investors, such as angel funds or
venture capitalists? - answer✔Less than 5%
Which of these is usually not a reason that you would consider using outsourcing for your
business? - answer✔To find new investors
, ©SIRJOEL EXAM SOLUTIONS
10/11/2024 1:41 PM
Which of these is considered a disadvantage of using equity to finance a business? -
answer✔You have to give up a portion of existing ownership (dilution), which may ultimately be
worth much more in the future
Which of these is a disadvantage of debt? - answer✔You have to pay back debt with interest. If it
is a high rate or compounds frequently, it could result in significant interest expense over the life
of a debt.
Which of these is not a benefit of a priced round or offering (meaning the investor and company
agreed to a specific price per share of equity sold to the investor at the time of investment)? -
answer✔Requires significant negotiation and legal documentation, more time.
Which of these is not an advantage to using a convertible note (meaning the company and
investor will agree to broader terms, but equity will not be issued to the investor until the
company raises a priced round in the future or the note reached maturity)? - answer✔There are
terms, but it is difficult to understand what was received for the investment until it is converted
to equity in the future.
What is crowdfunding? If you were to use this strategy, what steps would be important to a
successful crowdfunding campaign?
Briefly, what is the primary difference between equity crowdfunding in comparison to
"traditional" crowdfunding? - answer✔Sourcing funds from the public, either through donations
, ©SIRJOEL EXAM SOLUTIONS
10/11/2024 1:41 PM
or pre-orders, or by offering specialized opportunities (sponsorship/naming rights/temporary
roles/limited edition items or apparel/long-term discounts).
Equity crowdfunding is a much more modern approach that allows investors to participate in
early stage opportunities, even if they are non-accredited investors.
What is an accredited investor? Who regulates that investors need to be accredited (federal
agency) in order to participate in riskier investments?
Briefly describe. List three of the ways someone would qualify as an accredited investor. -
answer✔SEC regulates.
Net worth over $1M not including primary residence.
Income of 200k or more as an individual; 300k with spouse and expectations of same income the
coming years.
Others - company worth over $5M or entity that is composed of only accredited investors.
Why might a company and investor agree to using a convertible note or SAFE agreement instead
of a priced offering for equity?
What are the benefits and risks of using these alternative investment agreements? -
answer✔Because it offers more protections and would a lot for more specific terms, allowing the
investor a more specific opportunity for future investments or returns.
