Study Guide Questions for Chapter 1 True False 1 In general businesses with 100 500 employees are considered medium sized businesses F 2 A majority of small business owners feel their companies have increased their overall standard of living F 3 The first two NASDAQ stocks to be included in the Dow Jones Industrial Average were Microsoft and Apple T 4 The Dow Jones Industrial Average is the average price of all the companies traded on the New York Stock Exchange F 5 Venture Capital is a source of growth funding exclusively for technology companies with the potential for rapid scalable growth F 6 Historically annual returns for venture capitalists have averaged 143 over the past several decades F 7 The boom and bust cycle of the dot com era is similar to other periods of commercial innovation F 8 Yahoo Inc s IPO set the all time record in terms of capital raised for Silicon Valley companies F 9 Entrepreneurship did not grow very much after the Great Depression until it began increasing in the 1970 s T 10 Baby boomers are not as concerned about job security as were their parents T 11 The Fortune 500 employed 15 percent of the workforce in 2005 F 12 There was a burst of venture capital backed startups in the last half of the 1960s T 13 Today approximately 700 universities have offices for technology transfer F 14 Virtual companies are so called because they outsource much of their work F 15 In 2005 North American incubators assisted more than 350 000 startup companies F 16 The professionalization of the entrepreneurial process which has developed over the last 20 years has almost eliminated the need for young entrepreneurs to write business plans themselves T 17 Five percent of American adults report they invested in someone else s venture in the last three years T 18 Churning is a main component of a healthy economy T 19 The Global Entrepreneurship Monitor GEM is an organization created to gather information About the most successful start ups for potential investors F 20 The Total Entrepreneurial Activity TEA index tracks the percent of the adult population that is trying to start or has started an infant business because all other options for work are either absent or unsatisfactory T 21 Japan is among the leading countries in terms of entrepreneurial activity F 22 Thirty year old people fall into the most entrepreneurially active age demographic T 23 In general the number of female entrepreneurs is 2 3rds the number of male entrepreneurs F 24 A High Expectation Nascent Entrepreneur is an individual who expects to employ at least 50 employees within four years time through his or her new firm F 25 Approximately 66 of all businesses start in the owner s home but fail to grow primarily because the entrepreneur hires too many full time workers F 26 The former dean of the Nomura School of Advanced Management in Japan Jiro Tokuyama once said that the venture capital firms in Japan comprise one of the chief advantages for Japanese technology start ups F 27 General Motors became the first company to earn over one billion dollars in a single year on December 31 1985 F 28 According to ACNielsen International Research the most common reason for a person s desire to start a business is to increase his or her income T 29 Walmart and Home Depot collectively employ 1 8 of the US workforce F Multiple Choice 1 What percentage of new business ventures typically survive their first 5 years of operation A 100 B 81 C 65 D 40 E 25 2 In 1997 what percentage of small businesses was in service industries A 2 B 4 C 8 D 12 E 20 3 According to the survey cited in this chapter which of the following was not one of the most important innovations since 1980 A The Internet B Cell phones C Personal computers D Digital imagery E E mail 4 Which software application was the predecessor to the Lotus 1 2 3 spreadsheet A Microsoft Excel B MasterFile C Financial Works D FileMaker E VisiCalc 5 Which of the trends below converged to spark the Internet revolution of the 1990 s A Personal Computers Cell Phones and Laser Printing B Digital Technology Information Technology and Entrepreneurship C Personal Computers Modems and Floppy Disks D Entrepreneurship Venture Capital and Computer Software E Venture Capital Biotechnology and Telecommunications 6 By 2009 what percentage of the world s population had become Internet users A 2 B 16 C 24 D 60 E 57 7 Which of the following industries was the prime example of venture capital fueling the pace of commercial innovation A Semi Conductors B Mini Computers C Biotechnology D Personal Computers E All of the Above 8 What percent of GDP did venture capital backed companies generated in 2008 A 7 B 21 C 28 D 31 E 41 9 What was the increase in Benchmark Capital s investment of 5 million in eBay A 30 fold in two years B 300 fold in two years C 700 fold in two years D 1500 fold in two years E 4000 fold in two years 10 The stock market collapse that led to the Great Depression occurred in what year A 1928 B 1929 C 1930 D 1931 E 1932 11 Who reasoned that capitalism would be inevitably destroyed by elites A Whyte B Servan Schreiber C Schumpeter D Lenin E Marx 12 According to the GEM model how many sets of activities create the basis for national economic growth A 2 B 3 C 4 D 5 E 6 13 Which term is used to describe business churning A Artificial evolution B Evolving transition C Making the butter D Business expansion E Creative destruction 14 Baby boomers is the term used for Americans born in A Early 1920 s B 1920 s C Early 1930 s D Late 1930 s 1940 s E Mid 1940 s early 1960 s 15 What percent of the workforce did Fortune 500 companies employ in 1960 s A 10 B 15 C 20 D 25 E 30 16 What percent of the executives downsized in the 1980 s and 1990 s started their own businesses A 10 B 15 C 20 D 25 E 30 17 How much new VC money was committed in 1975 A 10 million B 45 million C 145 million D 430 million E 930 million 18 What does SBIR stand for A Savings Brokerage and Investment Reserve B Small Business Innovation Research C Space Based Infra Red D Speaker Boundary Interference Response E Small Business Interest Rate 19 How much does the Bayh Dole Act contribute annually to the US economy A 300 million B 950 million C 12 billion D 32 billion E 40 billion 20 What was the primary objective of the Bayh Dole Act A Commercial development of intellectual property B Investment of pension funds in venture capital companies C Gender equality among entrepreneurs D Support for young entrepreneurs E All of the