Entrepreneurship Overview Guide 3

Question 1

Which funding stage typically comes FIRST in a startup's financing journey?

Accepted Answer

Seed funding

Answer

Seed funding is the earliest formal investment stage, used to validate the business concept and develop an initial product before larger rounds.

Question 2

What is a 'pivot' in startup terminology?

Accepted Answer

A fundamental shift in business model or product direction based on market feedback

Answer

A pivot is a deliberate strategic change in product, customer segment, or business model when the original approach isn't gaining traction.

Question 3

In the context of entrepreneurship, what is a 'burn rate'?

Accepted Answer

The rate at which a startup spends its cash reserves each month

Answer

Burn rate measures how fast a startup consumes its cash, which directly determines how many months of 'runway' remain before needing more funding.

Question 4

Which analysis tool helps entrepreneurs evaluate internal strengths and weaknesses alongside external opportunities and threats?

Accepted Answer

SWOT analysis

Answer

SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a foundational strategic planning tool that assesses both internal and external business factors.

Question 5

What is 'sweat equity' in an entrepreneurial context?

Accepted Answer

Ownership stake earned by contributing labor and expertise rather than cash

Answer

Sweat equity refers to the ownership interest or value that co-founders and early employees earn by contributing their time, skills, and effort instead of financial investment.

Entrepreneurship Practice Test

Entrepreneurship Practice Test

Entrepreneurship Overview Guide 3