Entrepreneur Challenge MCQs (Chapterwise Multiple Choice Questions)

What does "MVP" stand for in Lean Startup methodology?

Maximum Value Proposition

Minimum Viable Product

Most Valuable Product

Most Viable Product

Answer & Explanation

Correct Answer: Minimum Viable Product

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What is a convertible note?

A debt financing in which the debt converts to equity at a future equity financing

Options you provide to your employees that convert into equity when they vest fully

The loan on your new Audi 24 convertible

Answer & Explanation

Correct Answer: A debt financing in which the debt converts to equity at a future equity financing

Note: This Question is unanswered, help us to find answer for this one

What's the classic 80/20 rule (the Pareto principle) with regards to marketing?

20% of sales close

80% percent of the market shares the same needs

80% of your profit comes from 20% of your customers.

80% of your time makes up 20% of your profits.

Answer & Explanation

Correct Answer: 80% of your profit comes from 20% of your customers.

Note: This Question is unanswered, help us to find answer for this one

What's a "full ratchet"?

A deal term used by investors to prevent dilution

A deal term used by investors to force the sale of the company

A deal term used by investors to accelerate option vesting

Answer & Explanation

Correct Answer: A deal term used by investors to prevent dilution

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What is the primary difference between angels and venture capitalists?

Angel typically require only informal agreements, Venture capitalists require a legally binding agreement

Angels invest their own funds, venture capitalists invest others funds

Angels only require a minority share, Venture capitalists require majority ownership

Angels generally make larger investments in comparison to those made by venture capitalists

Answer & Explanation

Correct Answer: Angels invest their own funds, venture capitalists invest others funds

Note: This Question is unanswered, help us to find answer for this one

What is "sweat equity"?

The opposite of "dry equity"

The hardest working, yet smelliest person on staff

A party's contribution to a project in the form of effort - as opposed to financial equity

A term used to measure how hard someone worked to raise funds

Answer & Explanation

Correct Answer: A party's contribution to a project in the form of effort - as opposed to financial equity

Note: This Question is unanswered, help us to find answer for this one

Which of the following is NOT a benefit of registering a trademark?

Presumption of being the valid owner

Retain the moral rights (control of modification)

Exclusive right to use the mark

Future right to make the mark "incontestable"

Right to recover up to 3x damages from infringement

Answer & Explanation

Correct Answer: Retain the moral rights (control of modification)

Note: This Question is unanswered, help us to find answer for this one

What is attrition?

An increase of employees in a start up company.

The percentage increase of investors between seed funding and round B funding in a start up company.

A reduction or decrease in numbers, size, or strength of a start up company.

Answer & Explanation

Correct Answer: A reduction or decrease in numbers, size, or strength of a start up company.

Note: This Question is unanswered, help us to find answer for this one

What is Due Dilligence?

A detailed method for managing a business.

A formal estimate of the value of something on the open market.

Process of vetting a business's financial information, team, and other important information that may influence the outcome of an investment.

Process by which Angel Investors speak with company founders to decide how much money they can make.

Answer & Explanation

Correct Answer: Process of vetting a business's financial information, team, and other important information that may influence the outcome of an investment.

Note: This Question is unanswered, help us to find answer for this one

What legal entity is the most Venture Capital friendly?

S-Corp

LLP

C-Corp

LLC

Answer & Explanation

Correct Answer: C-Corp

Note: This Question is unanswered, help us to find answer for this one

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