Entrepreneurship Theory Process Practice

Business

Quiz 15 :

Harvesting Entrepreneurial Ventures

Quiz 15 :

Harvesting Entrepreneurial Ventures

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An exit strategy is defined as that component of the business plan where an entrepreneur describes a method by which investors can realize a tangible return on their investment.
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True False
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True

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A managerial successor provides the critical ideas for new-product development and future ventures.
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True False
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False

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It is not necessary for the entrepreneur to seek professional advice and legal counsel when liquidating the firm.
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True False
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False

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The Oakland Scavenger Company case may have a major effect on the management succession plans of family business.
True False
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Depending on the situation, some qualities or characteristics a successor should possess are more important than others.
True False
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Only 10 percent of all privately held enterprises make it to a third generation.
True False
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The steps in developing a succession strategy are understanding the contextual aspects, identifying successor qualities, and developing a written succession plan.
True False
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Family members who do not play an active role in the business may still want to inherit part of the business.
True False
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The liquidity event can be achieved through an initial public offering (IPO) or complete sale of the venture.
True False
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The prospectus for an initial public offering (IPO) must disclose fully all pertinent information about a company and must present a fair representation of the firm's true prospects.
True False
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A buy/sell agreement can be used to make certain that funds are available to purchase the ownership interest.
True False
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Only 3 out of 10 privately held firms survive into a second generation.
True False
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Nonfamily employees sometimes put pressure on the owner/manager in an effort to protect their personal interests.
True False
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The basic rule for privately held businesses is this: The owner should develop a succession plan.
True False
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The forcing events that require an entrepreneur to step aside and let someone direct the operation are usually unforeseen and create major problems for the business.
True False
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Nepotism policies are lawful unless they have an "adverse impact" on women or minority groups (as in the Oakland Scavenger Company case).
True False
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Timing considerations generally do not impact decisions to sell a business because triggering events are unanticipated.
True False
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Sometimes a successor is needed because the business environment changes and a parallel change is needed at the top.
True False
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The harvest decision may come when the venture has grown to a stage where an initial public offering (IPO) is a possibility.
True False
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When looking ahead in choosing a successor from inside the organization, the founder often trains a team of executive managers consisting of both family and nonfamily members.
True False
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