Entrepreneurship Study Set 1

Idea lab is a combination of an incubator,a venture capitalist,and a business angel.

The most common type of joint venture is between two or more public sector companies.

International joint ventures are decreasing in popularity.

Cultural differences between international joint venture partners can create management difficulties.

To be successful the partners in a joint venture should have symmetry.

An acquisition is the purchase of a company,or part of a company,in which the acquired company ceases to exist independently.

One advantage to an acquisition is that there is an established customer base.

One disadvantage to an acquisition is that they are often a slow way to expand.

Some acquisitions are motivated more by the CEO's ego than by the return on investment.

Synergy is when the whole is the aggregate of all of its parts.

Most ventures that are up for sale have good to very successful profit records.

Often,when a business changes hands,key employees move into the acquiring company.

Synergy is defined as "the intangible benefits of mergers and acquisitions".

Lack of synergy is one of the most frequent causes of an acquisition's failure to meet its objectives.

The two most common means of acquisition are the entrepreneur's direct purchase of the firm's entire stock or assets or the bootstrap purchase of these assets.

When an entrepreneur bootstraps the purchase of a company,none of the price of the acquisition is cash.

When an entrepreneur bootstraps the purchase of a company,the entrepreneur usually puts down 10-20% in cash and then financing the remainder of the price with long-term debt paid back through the company's earnings.

Brokers for acquisitions represent the buyer,not the seller.

The U.S.Department of Justice frequently issues guidelines for different types of mergers.

Popular reasons to merge include protection,diversification and survival.