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Answers

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B. There are three stages of the entrepreneurship process. Please list them here: 1. ……………………………………………………………………….……………. 2. ………………………………………………………………………..…………….

3. ………………………………………………………………………..……………. C. List five types of entrepreneurship opportunities:

1. ………………………………………………….…………………………………………. 2. …………………………………………………………………..………………………. 3. …………………………………………………………………………………………….

1. Downside loss a. the basic long-standing needs of society and has little to do with profits.

2. entrepreneurship b. It involves the recognition, evaluation, and exploitation of

opportunities that create social value as opposed to personal or shareholder wealth

3. sustained regeneration c. It involves individuals or corporations that pursue entrepreneurial opportunities for the purpose of generating sales and profits

4. entrepreneurial opportunity d. It occurs when firms develop new cultures, processes, or structures

to support new product innovations in current markets as well as with existing products into new markets

5. law of small numbers e. It involves improving the firm’s ability to execute strategies and focuses on new processes instead of new products

6. organizational rejuvenation f. It occurs when a firm attempts to alter its own competitive strategy

7. entrepreneur g. It occurs when a firm proactively seeks to create a new product

market position that competitors have not recognized

8. illusion of control h. The process in which an individual or group of individuals in an existing corporation create a new organization or instigate renewal or innovation within that corporation

9. strategic renewal i. It occurs when an entrepreneur obtains financing from a financial

institution in the form of a loan

10. entrepreneurial alertness j. The firms that raise money from investors and then use this money to make investments in new firms

11. exploitation k. The wealthy individuals who provide capital to new companies

12. domain definition l. It represents individuals’ patterns of social relationships.

13. information asymmetry m. The analysis that helps entrepreneurs understand whether an idea is practical

14. angel investors n. The likelihood and magnitude of the opportunity’s downside loss

15. commercial

entrepreneurship

o. The resources the entrepreneur could lose if the opportunity does

not succeed

16. social network p. It occurs when individuals rely on a small sample of information to inform their decisions

17. venture capitalists q. It exists when entrepreneurs over-estimate the extent to which they can control the outcome of an opportunity

18. social entrepreneurship r. The activities and investments committed to gain returns from the

new product or service arising from the opportunity

19. feasibility analysis s. The individuals vary in terms of the information to which they have access

20. bank financing t. An individual’s ability to notice and be sensitive to new information about objects, incidents, and patterns of behavior in the environment

21. social value u. An individual who identifies, evaluates, and exploits opportunities

22. entrepreneurial risk v. An occasion to bring into existence new products and services that

allow outputs to be sold at a price greater than their cost of production

23. corporate entrepreneurship w. The identification, evaluation, and exploitation of opportunities

UNIT 6: key terms A. Matching

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4. ……………………………………………………………………..……………………. 5. ………………………………………………………………………..………………….

D. Briefly describe four factors that influence the ability of individuals to identify opportunities: 1. ……………………………………………………………………………………………………………..……. . ………………………………………………………………………………………………………..………….

2. ………………………………………………………………………………………………………..…………. . ……………………………………………………………………………………………………………………. 3. …………………………………………………………………………………………………………………….

. …………………………………………………………………………………………………….………………. 4. …………………………………………………………………………………………………….………………. …………………………………………………………………………………………………….………………..

E. Briefly describe how entrepreneurs evaluate opportunities: . ……………………………………………………………………………………………………………………

. …………………………………………………………………………………………………………….……… . …………………………………………………………………………………………………………….……… . …………………………………………………………………………………………………….…………........

F. Briefly describe three main factors that can help entrepreneurs decide whether they should exploit an opportunity:

1. …………………………………………………………………………………………….…………………… ……………………………………………………………………………………………….………………… 2. ……………………………………………………………………………………………….…………………

……………………………………………………………………………………………….………………… 3. ……………………………………………. ……………………………………………….………………….. …………………………………………………………………………………………..…….…………………

G. Briefly review three main sources of external capital for entrepreneurs: 1. ………………………………………………………………………………………………………………….

2. …………………………………………………………………………………………………………………. 3. ………………………………………………………………………………………………………………….

H. Compare and contrast between angel investors and venture capitalists: . …………………………………………………………………………………………………………………… . …………………………………………………………………………………………………………….………

. …………………………………………………………………………………………………………….……… . …………………………………………………………………………………………………….…………........

I. Briefly describe four types of corporate entrepreneurships: 1. ……………………………………………………………………………………………………..………….. 2. ………………………………………………………………………………………………………………….

3. …………………………………………………………………………………………………………………. 4. ………………………………………………………………………………………….……………………….

J. Briefly describe the factors that may adversely affect an entrepreneur’s perceptions of risk while conducting a feasibility analysis: …………………………………………………………………………….…………………………………………

………………………………………………………………………………………………….…………………… ………………………………………………………………………………………………….…………………… …………………………………………………………………………………………………….…………………

K. Angel investors, venture capitalists, and banks provide external money to fund an entrepreneur’s operations. How do they differ in their offerings?

…………………………………………………………………………….………………………………………… ………………………………………………………………………………………………….…………………… ………………………………………………………………………………………………….……………………

…………………………………………………………………………………………………….………………… ……………………………………………………………………………………………………………………….

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L. Distinguish between commercial and social entrepreneurship on the bases of purpose, resource availability, and performance measures. ………………………………………………………………………………..………………………………………

…………………………………………………………………………………………..…………………………… ………………………………………………………………………………………..……………………………… …………………………………………………………………………………………….…………………………

…………………………………………………………………………………………….…………………………

M. True (T)/ False (F): _____ 1. According to the research, 34 percent of new businesses do not survive the first two years, 50 percent four years, and 60 percent six years.

_____ 2. The research suggests that organizations started by entrepreneurial teams tend to perform better than those started by individuals working by themselves.

_____ 3. The emergence of the internet provides an example of opportunities that arose from new methods of organizing.

_____ 4. In short, five different types of opportunities arise from the creation of new products or service, the discovery of new geographical markets, the discovery of new raw materials, the discovery of new

methods of production, and the discovery of new methods of organizing. _____ 5. An individual’s ability to notice and be sensitive to new information about objects, incidents, and

patterns of behavior in the environment is one of the factors of opportunity identification. _____ 6. Research suggests that individuals with extended networks are less likely to identify potential

entrepreneurial opportunities than those with more narrow social networks. _____ 7. In feasibility analysis, entrepreneurs will study customer demands, the structure of the industry,

and the entrepreneur’s ability to provide the new product or service. _____ 8. According to research, there are three factors that may adversely influence the accuracy of an

entrepreneur’s risk perceptions. _____ 9. When entrepreneurs evaluate opportunities, they pay careful attention to entrepreneurial risk,

and savvy entrepreneurs work to reduce risk before engaging in substantial commitments of capital. _____10. Exploitation occurs far before an entrepreneur decides that an opportunity is worth pursuing.

_____11. Resources from management teams such as ability, knowledge, and information are necessary for entrepreneurs to exploit the opportunity as these will ensure high levels of organizational performance.

_____12. In general, venture capitalists make more investments than angel investors.

_____13. Social entrepreneurship does not involve the recognition, evaluation, and exploitation of opportunities.

_____14. Commercial entrepreneurs focus on less quantitative performance measures that are not related to money.

_____15. Large networks are not essential for social entrepreneurs to be offered potential sources of capital to fund their social missions.

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