Questions and Answers of Entrepreneurial Finance 7th

9. What do venture capitalists consider before investing in a fi rm and how do they add value to the fund?
8. Identify some of the elements in the contracts between venture capital and the investors and also between the venture capital and investee fi rms.
7. What are the processes involved in venture capital investment?
6. Venture capital fi rms were previously organised as closed-end funds but they are now being organised as limited partnership. What are the main diff erences between the two forms of organisation?
5. Provide an overview of the venture capital market in a developing country context.
4. What are the pros and cons of using venture capital fi nancing?
3. What are the main diff erences between venture capital fi nance and other sources of fi nance?
2. Discuss the nature of venture capital and explain the various types of venture capital.
1. Discuss the relevance of venture capital in small business fi nancing.
12. Why do some business plans fail in practice?
11. How will you go about implementing and revising the business plan of a new venture?
10. What should an entrepreneur do to convince a potential investor about the prospects of his/her venture?
9. Why is due diligence such an important issue to the fi nance provider and the entrepreneur?
8. What do investors and lenders look out for in a business plan?
7. Describe the fi nancial component of the business plan. What and what go into that section of the plan?
6. Explain how the business plan of a small business relates to its strategic plan.
5. How should a business plan developed to seek funding from a bank be diff erent from one prepared to apply to an equity investor?
4. As an entrepreneur, how will go about preparing your business plan and presenting it to a venture capitalist?
3. Describe the major components of a business plan.
2. How diff erent is the business plan prepared for a new venture from the plan of an established business?
11. What are the sources of fi nance available to MSMEs in Africa? What are the problems associated with these fi nancing sources?1. Why should an entrepreneur be interested in preparing a business
10. What are the benefi ts of issuing shares to the general public?
9. Discuss the various sources of equity and debt fi nance available to an MSME.
8. Discuss the sequence of new venture fi nancing.
7. Explain the concept of layering in small business fi nance.
6. Discuss the various stages involved in new venture development.
5. How does the ‘fi nance gap’ lead to credit rationing? What are the consequences of information asymmetry in new venture and small business fi nancing?
4. An entrepreneur is considering starting a food chain business: How can he/she execute this idea?
3. What is franchising and what are the advantages and disadvantages of an MSME entering into a franchise agreement?
2. What are the diff erences between a private limited company and a public limited company?
1. What are the various forms of business ownership? What factors should an entrepreneur consider in evaluating the various forms of ownership?
8. Explain how MSMEs can increase their access to formal fi nance.
7. Discuss the barriers to MSMEs’ access to fi nance in an Africa country of your choice?
6. What are the challenges to MSME development in Africa?
5. Discuss the importance of MSMEs in the economic development process in Africa.
4. What are the characteristics of MSMEs in developing countries?
3. How are MSMEs defi ned in developed and developing countries?
2. What should an entrepreneur do to convince a potential investor about the prospects of his/her venture?
1. What is entrepreneurial fi nance? How diff erent is entrepreneurial fi nance from corporate fi nance?
discuss factors that aff ect the fi nancing choice of MSMEs
explain how to determine fi nancing requirement
identify the various fi nancing options available to MSMEs
discuss the factors that influence the investors’ harvesting decisions
describe how employee stock ownership can be used for harvesting
show how management buyout can be used as a form of harvesting
explain how investors can harvest their investing through acquisitions
describe the process involved in going public and how investors can use going public to harvest their investment
identify the various techniques involved in harvesting
appreciate the importance of following, monitoring and taking corrective measures after the capital budgeting decision has been made
determine how capital budgeting decisions are influenced by capital rationing
show how capital budgeting decisions are arrived at based on independent and mutually exclusive projects
explain the techniques or methods used in evaluating capital budgeting projects
list and explain the steps involved in the capital budgeting process
discuss the factors that affect capital budgeting decisions
explain the rationale for capital budgeting
understand the criteria for selecting a venture valuation model
appreciate the strengths and weaknesses of the valuation methods
use the various valuation methods
explain how new ventures and small businesses are valued
explain how firms’ current liabilities are managed
discuss how firms invest excess cash through marketable securities management
explain the relevance of good cash management among firms
appreciate how accounts receivable are efficiently managed
discuss the importance of proper inventory management
describe the components of working capital management
explain the concept of working capital management
explain and calculate amortisation
distinguish between ordinary annuity and annuity due
calculate future and present values based on annuities
explain and calculate perpetuities
distinguish between effective rate and stated rate
calculate future value lump sum and prevent value lump sum
compare simple and compound interest
appreciate the concept of ‘time value of money’
discuss the uses and limitations of ratio analysis.
evaluate the performance of a fi rm based on fi nancial ratios
perform vertical and horizontal analysis of a fi rm’s fi nancial statements
discuss the problems with fi nancial statements
identify the elements of fi nancial statements
explain the various forms of fi nancial statements
appreciate how businesses prepare and make use of fi nancial statements
identify the determinants of MSMEs’ financing needs
explain how to project financing needs using break-even analysis
illustrate how to project financing needs and growth of MSMEs
show the interrelationship between planning, budgeting and forecasting
understand how to prepare a sales forecast for a new business
appreciate how to prepare a sales forecast for an existing business
explain the concept of financial planning and the financial planning process
illustrate how banks participate in the microfi nance market
identify the challenges confronting microfi nance institutions
discuss the lending models and the credit risk management of microfi -nance institutions
show the sustainability of microfi nance institutions
explain the operations of microfi nance institutions
discuss the importance of microfi nance
defi ne and provide an overview of microfi nance
identify government- and donor-supported funding schemes
discuss the role of the public sector in MSME development
explain the rationale for public sector interventions
explain the channels through which government supports small businesses
explain how interest rates are determined

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