SOLUTION MANUAL For Entrepreneurial Finance, 7th Edition by J. Chris Leach, Ronald W. Melicher, Verified Chapters 1 - 16, Complete Newest Version With CAPSTONE CASES

,TABLE OF CONTENTS NH NH NH




Part 1: THE ENTREPRENEURIAL ENVIRONMENT.
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1. Introduction to
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Finance for Entrepreneurs. NH NH




2. Developing the Business Idea.
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Part 2: ORGANIZING AND OPERATING THE VENTURE.
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3. Organizing and Financing a New Venture.
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4. Preparing and Using Financial Statements.
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5. Evaluating Operating and Financial Performance.
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Part 3: PLANNING FOR THE FUTURE.
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6. Managing Cash Flow.
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7. Types and Costs of Financial Capital.
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8. Securities Law Considerations When Obtaining Venture Financing.
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Part 4: CREATING AND RECOGNIZING VENTURE VALUE.
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9. Projecting Financial Statements.
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10. Valuing Early-Stage Ventures.
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11. Venture Capital Valuation Methods.
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Part 5: STRUCTURING FINANCING FOR THE GROWING VENTURE.
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12. Professional Venture Capital.
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13. Other Financing Alternatives.
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14. Security Structures and Determining Enterprise Values.
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Part 6: EXIT AND TURNAROUND STRATEGIES.
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15. Harvesting the Business Venture Investment.
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16. Financially Troubled Ventures: Turnaround Opportunities?
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Part 7: CAPSTONE CASES.
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Case 1. Eco-Products, Inc.
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Case 2. Spatial Technology,
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,Chapter 1 NH




INTRODUCTION TO FINANCE FOR ENTREPRENEURS NH NH NH NH




FOCUS

The purpose of this first chapter is to present an overview of what entrepreneurial finance is about. In doing so we
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hope to convey to you the importance of understanding and applying entrepreneurial finance methods and tools
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to help ensure an entrepreneurial venture is successful.We present a life cycle approach to the teaching of entrep
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reneurial finance where we cover venture operating and financial decisions faced by the entrepreneur as a ventur
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e progresses from an idea through to harvesting the venture.
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LEARNING OBJECTIVES NH




LO 1.1: Characterize the entrepreneurial process.
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LO 1.2: Describe entrepreneurship and some characteristics of entrepreneurs.
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LO 1.3: Indicate several megatrends providing waves of entrepreneurial opportunities.LO 1.4: Lis
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t and describe the seven principles of entrepreneurial finance.
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LO 1.5: Discuss entrepreneurial finance and the role of the financial manager.LO 1.6: Des
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cribe the various stages of a successful venture‘s life cycle.
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LO 1.7: Identify, by life cycle stage, the relevant types of financing and investors.LO 1.8: Unde
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rstand the life cycle approach used in this book.
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CHAPTER OUTLINE NH




1.1 THE ENTREPRENEURIAL PROCESS NH NH




1.2 ENTREPRENEURSHIP FUNDAMENTALS NH




A. Who is an Entrepreneur? NH NH NH




B. Basic Definitions NH




C. Entrepreneurial Traits or Characteristics NH NH NH




D. Opportunities Exist But Not Without Risks NH NH NH NH NH




1.3 SOURCES OF ENTREPRENEURIAL OPPORTUNITIES NH NH NH




A. Societal Changes NH




B. Demographic Changes NH




C. Technological Changes NH




D. Emerging Economies and Global Changes NH NH NH NH




E. Crises and ―Bubbles‖ NH NH




F. Disruptive Innovation NH




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, 1.4 PRINCIPLES OF ENTREPRENEURIAL FINANCE NH NH NH




A. Real, Human, and Financial Capital must be Rented from Owners (Principle #1)
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B. Risk and Expected Reward go Hand in Hand (Principle #2) NH NH NH NH NH NH NH NH NH




C. While Accounting is the Language of Business, Cash is the Currency (Principle #3)
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D. New Venture Financing Involves Search, Negotiation, and Privacy (Principle #4)
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E. A Venture‘s Financial Objective is to Increase Value (Principle #5)
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F. It is Dangerous to Assume that People Act Against Their Own Self-
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Interests(Principle #6) N
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G. Venture Character and Reputation can be Assets or Liabilities (Principle #7) NH NH NH NH NH NH NH NH NH NH




1.5 ROLE OF ENTREPRENEURIAL FINANCE NH NH NH




1.6 THE SUCCESSFUL VENTURE LIFE CYCLE
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A. Development Stage NH




B. Startup Stage NH




C. Survival Stage NH




D. Rapid-Growth Stage NH




E. Early-Maturity Stage NH




F. Life Cycle Stages and the Entrepreneurial Process NH NH NH NH NH NH




1.7 FINANCING THROUGH THE VENTURE LIFE CYCLE NH NH NH NH NH




A. Seed Financing NH




B. Startup Financing NH




C. First-Round Financing NH




D. Second-Round Financing NH




E. Mezzanine Financing NH




F. Liquidity-Stage Financing NH




G. Seasoned Financing NH




1.8 LIFE CYCLE APPROACH FOR TEACHING ENTREPRENEURIAL FINANCESUMMARY
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DISCUSSION QUESTIONS AND ANSWERS NH NH NH




1. What is the entrepreneurial process?
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The entrepreneurial process comprises: developing opportunities, gathering resources, andmanaging a
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nd building operations with the goal of creating value.
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2. What is entrepreneurship? What are some basic characteristics of entrepreneurs?
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Entrepreneurship is the process of changing ideas into commercial opportunities and creatingvalue. While NH NH NH NH NH NH NH NH NH NH NH N
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there is no prototypical entrepreneur, many are good at recognizing commercial opportunities, tend to be
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optimistic, and envision a plan for the future. NH NH NH NH NH NH NH




3. Why do businesses close or cease operating? What are the primary reasons why businessesfail?
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