Entrepreneurship Funding and Finance

Question 1

What is venture capital?

Accepted Answer

Private equity investment in high-growth startups in exchange for equity

Answer

A government loan for small businesses

Answer

A type of business insurance

Answer

A grant from a nonprofit organization

Question 2

What is an angel investor?

Accepted Answer

A wealthy individual who provides capital to startups in early stages

Answer

A government agency that funds small businesses

Answer

A bank that specializes in startup loans

Answer

A crowdfunding platform operator

Question 3

What does equity financing mean?

Accepted Answer

Raising capital by selling ownership shares in a company

Answer

Borrowing money that must be repaid with interest

Answer

Leasing equipment rather than buying it

Answer

Applying for a government small business grant

Question 4

What is a convertible note?

Accepted Answer

A short-term debt instrument that converts into equity at a future funding round

Answer

A business check issued by a bank

Answer

A legal document for trademark registration

Answer

A performance review tool for employees

Question 5

What is a SAFE (Simple Agreement for Future Equity)?

Accepted Answer

An investment contract that gives investors the right to future equity without debt terms

Answer

A type of government-backed small business loan

Answer

A standard accounting framework for startups

Answer

A secure payment processing service

Question 6

What is the SBA's primary role for small business entrepreneurs?

Accepted Answer

To provide loan guarantees and resources that help small businesses access capital

Answer

To invest directly in startups for equity

Answer

To regulate stock markets for small-cap companies

Answer

To collect taxes from self-employed individuals