CMAT Innovation and Entrepreneurship 2

Question 1

What is the difference between an angel investor and a venture capitalist?

Accepted Answer

Angel investors use their own money while VCs manage pooled funds

Answer

Angel investors are high-net-worth individuals investing personal funds, while VCs manage pooled institutional capital.

Question 2

What does 'pivoting' mean in the startup world?

Accepted Answer

Changing the fundamental business strategy while retaining core learnings

Answer

A pivot is a structured course correction in business strategy, product, or target market while maintaining core assets and learnings.

Question 3

What is a 'value proposition' in business?

Accepted Answer

The statement of what benefit a product/service provides and why customers should choose it

Answer

A value proposition clearly communicates the unique benefits a product delivers and why it is better than alternatives.

Question 4

Which of these best describes 'design thinking'?

Accepted Answer

A human-centered approach to innovation that emphasizes empathy and iteration

Answer

Design thinking is an iterative, user-centered problem-solving process involving empathy, ideation, prototyping, and testing.

Question 5

In entrepreneurship, what is an 'exit strategy'?

Accepted Answer

A founder's plan to sell or transfer ownership to realize value from the business

Answer

An exit strategy is how entrepreneurs and investors plan to liquidate their investment — common exits include IPOs, acquisitions, or MBOs.

CMAT - Common Management Admission Test Practice Test