Entrepreneurial Finance International Edition 3rd Edition By J. Chris Leach Test Bank
INTRODUCTION AND OVERVIEW
- Entrepreneurs provide the financing to individuals who think, reason, and act to convert ideas into commercial opportunities and create opportunities.
- Entrepreneurship is the process of changing ideas into commercial opportunities and creating value.
3. An entrepreneur is an individual who thinks, reasons, and acts to convert ideas into commercial opportunities and to create value.
4. Mark Twain once said, “I was always able to see an opportunity before it became one.”
5. Small businesses, those with less than 500 employees, represent over 99 percent of all employers, and account for about one-half of the gross domestic product in the United States.
- Small and growing enterprises are critical to the U.S. economy; small firms provide 20 to 30 percent of net new jobs.
- Small high-technology firms are responsible for twice as many product innovations per employee and obtain more patents per sales dollar than large high-technology firms.
8. Phillips and Kirchhoff, using Dun & Bradstreet data, found that 24 percent of new firms were still in existence after two years of operation.
9. Nearly half of business failures are due to economic factors such as inadequate sales, insufficient profits, and industry weakness.
10. Although the risks associated with starting a new entrepreneurial venture are large, there is always room for one more success.
11. Recent studies by Phillips and Kirchhoff, and by Headd, found that about 38%-40% of new firms survived six years of operation.
12. One study of Inc. magazine’s 500 high-growth firms suggests that about 88 percent of founders feel their firms’ successes are due to