MBA Entrepreneurship 2

Question 1

What is 'angel investing' in the startup ecosystem?

Accepted Answer

High-net-worth individuals investing their personal funds in early-stage startups, often providing mentorship too

Answer

Angel investors are typically experienced entrepreneurs or executives who invest their personal capital in early-stage startups, often filling the funding gap before venture capital becomes available.

Question 2

What is a 'go-to-market strategy' for a startup?

Accepted Answer

A plan specifying how the startup will reach target customers, deliver its value proposition, and achieve competitive positioning at launch

Answer

A go-to-market (GTM) strategy defines target customer segments, sales channels, pricing, messaging, and the action plan for bringing a new product to market successfully.

Question 3

What is 'product-market fit'?

Accepted Answer

The degree to which a product satisfies strong market demand — evidenced by rapid organic growth and customer retention

Answer

Product-market fit (Marc Andreessen) is achieved when a product genuinely meets the needs of a specific market, evidenced by high retention, strong word-of-mouth, and growing organic demand.

Question 4

What is a 'term sheet' in startup fundraising?

Accepted Answer

A non-binding document outlining the key terms and conditions of a proposed investment before formal documentation

Answer

A term sheet is a preliminary, non-binding agreement that outlines the key deal terms — valuation, equity stake, board seats, investor rights — before lawyers draft the final binding investment documents.

Question 5

What is 'dilution' in the context of startup equity?

Accepted Answer

The reduction in existing shareholders' ownership percentage when new shares are issued in a funding round

Answer

Dilution occurs when a startup issues new shares (to investors, employees, or advisors), reducing the percentage ownership of existing shareholders even if the total value of their stake may increase.

MBA - Degree Master of Business Administration Practice Test

MBA - Degree Master of Business Administration Practice Test

MBA Entrepreneurship 2