Which of the following best states the difference between seed capital and startup capital?

Seed capital is for research and planning while startup capital is for operating expenses.

Seed capital is provided by venture capitalists while startup capital is provided by banks.

Seed capital pays for new employees while startup capital pays for equipment and inputs.

Seed capital is for new businesses while startup capital is for businesses that are expanding.

Which of the following is an advantage of equity financing over debt financing?

Equity financing provides necessary capital more quickly than a loan.

The original partners can maintain total control of the company.

It's possible to raise more money than a loan can usually provide.

Debt financing is reserved for large corporations with a history of high profits.

Which of the following is generally not required to get a business loan from a bank?

A wealthy startup investor

A positive operating history

An expectation of profits

A solid business plan

Which of the following enterprises would be most likely to secure a large business loan?

A struggling national grocery store chain

A well-established real-estate developer

A one-year-old e-commerce company

A small database design company

Which of the following accurately describes an initial public offering (IPO)?

The government takeover of a business

The establishment of a new business

The first sale of stock to the public

The beginning of the productive process

Which of the following is one advantage for a company that goes public?

Management retains control of the company

The pressure to make profits is reduced

A greater labor pool is available for hire

Money is raised without going into debt

which of the following factors would be most likely to lead to a successful IPO?

Bullish market conditions

A history of good profits

A risky-sounding prospectus

A brand new approach to business

Which of the following does not help explain why the Google IPO was successful?

Investor confidence in Internet companies was high

The fact that Google was a household name

Google's history of borrowing large sums of money

The size of Google's market share of Internet searching

Did I get all these right?

1.A
2.C
3.A
4.B
5.D
6.A
7.C
8.B

1. The correct answer is B. Seed capital is provided by venture capitalists while startup capital is provided by banks. Seed capital refers to the initial funding that is needed to start a new business, while startup capital refers to the funds required to cover the operating expenses of a new business.

2. The correct answer is C. It's possible to raise more money than a loan can usually provide. Equity financing allows a company to raise funds by selling a stake in the company to investors, while debt financing involves borrowing money and repaying it with interest. With equity financing, there is potential to raise larger amounts of capital compared to a loan.

3. The correct answer is A. A wealthy startup investor is generally not required to get a business loan from a bank. While having additional personal funds or investors can increase the chances of getting a loan approved, it is not a mandatory requirement. However, a positive operating history, an expectation of profits, and a solid business plan are typically required by banks to assess the likelihood of repayment.

4. The correct answer is B. A well-established real estate developer would be most likely to secure a large business loan. Banks are more likely to provide larger loans to established and reputable businesses with a proven track record of success, such as a well-established real estate developer.

5. The correct answer is C. The first sale of stock to the public accurately describes an initial public offering (IPO). An IPO is the process through which a privately-held company offers shares of its stock to the public for the first time, allowing individuals to become shareholders.

6. The correct answer is D. Money is raised without going into debt. When a company goes public through an IPO, it sells shares of its stock to the public, generating funds that the company can use without taking on additional debt. This is one advantage for a company that goes public.

7. The correct answer is A. Bullish market conditions would be most likely to lead to a successful IPO. When market conditions are bullish, there is high investor confidence and a favorable environment for companies to successfully go public. This increases the chances of a successful IPO.

8. The correct answer is C. Google's history of borrowing large sums of money does not help explain why the Google IPO was successful. The success of Google's IPO was more influenced by factors such as investor confidence in internet companies, the fact that Google was a well-known household name, and the size of Google's market share of internet searching. The history of borrowing money is not directly related to the success of the IPO.