Sources of Funding Questions

Name

Class Period

• 2A
• 3A

What is start-up capital?

• Money borrowed from banks only
• Cash used to start a business
• Profits earned in the first year
• Monthly business expenses

What does equity in a business represent?

• The total debt of the business
• Monthly revenue streams
• Amount of ownership in a business
• Number of employees

Which type of investor typically invests at least $3-5 million and requires 25% equity?

• Angel investors
• Bank lenders
• Venture capitalists
• Family members

What is the term for assets that can be taken if a loan isn't repaid?

• Trade credit
• Equity financing
• Start-up costs
• Collateral

What is equity financing?

• A bank loan with interest
• A short-term business loan
• Raising money in exchange for ownership percentage
• Monthly payment plans

What is the maximum typical investment amount for angel investors?

• $1 million
• $5 million
• $10 million
• $500,000

Which source of debt financing involves creating an online business profile?

• Trade credit
• Bank loans
• Social lending
• SBA loans

What is trade credit?

• A government grant
• A credit line from another business
• Stock market trading
• Personal savings investment