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Please see the correct answers below.
1) F. Top tier venture capitalists generally invest in Companies have previously raised a seed round and Companies who’s founder they have worked with in the past. PR doesn’t matter.
2) FALSE. The main reason you should get into business is to compete. NOPE, that’s FALSE. Never compete.
3) F. A Monopoly has, Proprietary technology, Network effects, Economies of scaling and Branding.
4) C. Doing a press release is NOT considered one of the 7 STARTUP MILESTONES
5) True. Andy Rachleff onion theory of risk states that you raise seed money in order to peel away risks, basically peeling away risks as you go.
6) B. If you are a consumer product, you have viral growth Risks. Though all other risks are real and do exist.
7) True. Bootstrapping means building a business that does not require investors
8) F. Raising money is a full-time job but the person that raises the most is NOT the most successful; you just need to raise enough. Raising too much can lead to giving away too much which could lead to meager ownership which could lead to lack of motivation to work. It’ a slippery slope.
9) C. The more capital your business is going to need, the more precise you need to be on your milestones because the RISKS are HIGHER.
10) E. The only predictions that should be used in a pitch are the three versions of your company’s financial projections which should include, Best case, Moderate Case, and Worst Case. If you picked a phone case your somewhere dazing off in la la land.
11) TRUE. It’s a bad idea to try to raise money when your company isn’t in good enough shape to attract capital. You will burn your reputation and waste time.
12) G. Laker floor seats and a ride in a nice Ferrari sounds fun and exciting but ultimately the investor who has Domain expertise in your company and can help you with introductions for business development and Series A will be a better choice.
13) FALSE. It’s better to avoid crowded markets by creating new ones.
14) TRUE. A Startup in innovative markets are more likely to have monopolies than an established firm in an established market. True innovators don’t need to fight for scraps.
15. FALSE. It’s typically much EASIER to improve on somebody else's idea than it is to build something from scratch. Humans are always looking for Easy.
16) TRUE. Companies that have really extreme strengths often have serious flaws. That’s very true; it’ a game of outliers don;t forget that, good investor sniff out the strengths and ride them till the end.
17. C. An important part of the value of a company is how much potential it has for profit in the Future. Growth is very expensive and can make the financials look horrifying in the early days.
18) G. To be successful in a startup, you need to know the needs of your own users and achieve domain expertise. Money helps but it’s not a determining factor and no one cares about your GPA in the real world except you and your parents.
