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Summary Entrepreneurial Finance

- J Leach, et al
ISBN-10 0538478152 ISBN-13 9780538478151
129 Flashcards & Notes
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A snapshot of the summary - Entrepreneurial Finance Author: J Leach Ronald Melicher ISBN: 9780538478151

  • 1 introduction and overview

  • 1.1 Characterize the entrepreneurial process

  • What resources are needed to move from opportunity to entrepreneurial venture?
    gathering physical assets, intellectual property, human resources and financial capital.
  • What are the three steps of the entrepreneurial process?
    1) developing opportunities
    2) managing and building operations
    3) gathering resources
  • 1.3 indicate three megatrend providing waves of entrepreneurial opportunities

  • What are the megatrend categories?
    - Societal trends or changes
    - Demographic trends or changes
    - technological trends or changes
    - crises and 'bubbles'
  • 1.4 list and describe the seven principles of entrepreneurial finance

  • what are the seven principles of entrepreneurial finance?
    1) Real, human, and financial capital must be rented from owners
    2) risk and expected reward go hand in hand
    3) while accounting is the language of business, cash is the currency 
    4) new venture financing involves search, negotiation, and privacy
    5) a venture's financial objective is to increase value
    6) it is dangerous to assume that people act against their own self-interest
    7) venture character and reputation can be assets or liabilities
  • What is free cash?
    free cash is the cash exceeding that which is needed to operate, pay creditors, and invest in the assets.
  • 1.5 discuss entrepreneurial finance and the role of the financial manager

  • What is entrepreneurial finance?
    entrepreneurial finance is the application and adaptation of financial tools, techniques, and principles to the planning, funding, operations and valuation of an entrepreneurial venture. 
  • When does financial distress occur?
    Financial distress occurs when cash flow is insufficient to meet current debt obligations.
  • 1.6 describe the various stages of a successful venture's life cycle

  • What are the stages of live cycle?
    - Development stage
    - startup stage
    - survival stage
    - rapid-growth stage
    - early- maturity stage
  • What are early stage ventures?
    early stage ventures are new or very young firms with limited operating histories. They are in their development, startup, or survival life cycle stages.
  • What firms have produced successful operating histories and are in their rapid-grwoth or maturity life cycle stages?
    seasoned firms.
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