Questions for Chapter 6
1. A talented entrepreneur should be able to substitute for an experienced management team. (False)
2. The size of your organization is inversely correlated to the amount of revenue your business can derive (False)
3. Hiring a salesperson is more attractive than increasing support staff in regards to revenue generated. (True)
4. Your team members can help you to evaluate feedback from outside sources. (True)
5. Over 95% of entrepreneurs in the US report that their team members are the main source of seed financing. (False)
6. A business superstar is unlikely to possess all the business skills needed for long term success. (True)
7. Analysis of your resume will help you decide what other team members your firm needs. (True)
8. Entrepreneurs who are overly conscious of their own weaknesses are more likely to fail (True)
9. The Myers-Briggs personality type indicator can accurately predict an individual’s likelihood for success in an entrepreneurial endeavor. (False)
10. Certain personalities are better suited for entrepreneurship than others. (False)
11. Fast, dramatic growth can be a mistake for a business.
12. Early stage companies tend to be hierarchal.
13. Co-founders of a start-up should work on every task and decision together. (False)
14. It is more common for teams to self-destruct because of personal conflicts than for lack of funding. (True)
15. If you decide to start a venture, you should notify your current employer as soon as possible. (True)
16. After you have started a business, it is a bad idea to combine your new job with working fulltime elsewhere. (False)
17. If employees own equity in the company, they usually work harder. (True)
18. In general, founder shares should be granted to at least 10 people. (False)
19. Founder shares should be distributed equally between all founders. (False)
20. It is a mistake to distribute the entire supply of options to existing employees. (True)
21. Startups should negotiate employee salaries below market levels. (True)
22. You may find an angel investor who will guide you at the early stages of your venture. (True)
23. Free resources are poor substitutes for a qualified lawyer. (False)
24. Board members should be encouraged to act in the best interest of the principal owner exclusively. (False)
25. Company culture is incredibly difficult to change after it has been established. (True)
1. According to study by Babson College and London Business School, businesses with growth aspirations plan on employing more than 20 people within the next: A) 2 Years
B) 3 Years
C) 4 Years
D) 5 Years
E) None of the above
(Answer – D)
2. How much, according to Robert Morris and Associates, do restaurants generate in net income before taxes on average, approximately? A) 2%
(Answer – B)
3. Which of the following is true about teams?
A) Teams provide constructive feedback for your ideas.
B) Teams increase your contact network exponentially.
C) Teams increase your revenue.
D) Teams provide you with moral support.
E) All of the above
(Answer – E)
4. Which of the following should the founder of the venture do first when deciding whether or not to be the CEO of his company? A) Ask for his/her friends opinion
B) Take at least three personality tests
C) Review his/her resume
D) Work as a hired manager for at least 4 years
E) Consult with his/her team members
(Answer – C)
5. Individuals that possess which of the following traits are most likely to launch their own businesses? A) Overly conscious of their own weaknesses
B) An aptitude for benchmarking their competitors’ strengths C) Can objectively evaluate his strengths and weaknesses
D) Emphasizes his or her strengths
E) Oblivious to his or her own weaknesses...
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