Question

Please decide whether or not the following statements are true or false.

1. The majority of Entrepreneurial firms are financed by Venture Capital firms.
2. Traditional bankers never lend to “start-up” firms.
3. Entrepreneurs may apply directly to the Small Business Administration (SBA).
4. Most entrepreneurs utilize and stick with only one source of funding.
5. Government grants are numerous for entrepreneurial firms.

Answer 1

(1): The majority of Entrepreneurial firms are financed by Venture Capital firms – TRUE.

This is because venture capital firms like to back risky entrepreneurial projects based on good idea that has good return potential.

(2): Traditional bankers never lend to “start-up” firms – FALSE

Not all traditional bankers shy from lending to start ups. It is just that they are constrained with regulatory provisions for risk exposure.

(3): Entrepreneurs may apply directly to the Small Business Administration (SBA) – FALSE

This is because SBA works with lenders and not directly with entrepreneurs.

(4): Most entrepreneurs utilize and stick with only one source of funding – FALSE.

This depends on the stage of the business the entrepreneurial venture is in.

(5): Government grants are numerous for entrepreneurial firms – TRUE

Major grants are Entrepreneurs’ Programme, Research and Development Tax Incentive, Export Market Development Grant etc.