CCS-MCQ-6


  1. Where does seed funding typically come from in startups?

    a) Venture capital firms

    b) Angel investors

    c) Banks

    d) Public investors

    Answer: b) Angel investors

  2. What is the primary purpose of venture capital funding for startups?

    a) Supporting product development

    b) Financing daily operations

    c) Providing long-term loans

    d) Funding research and development

    Answer: a) Supporting product development

  3. Which funding source allows startups to raise capital from a large number of individuals through online campaigns?

    a) Angel investors

    b) Venture capital firms

    c) Crowdfunding platforms

    d) Accelerators

    Answer: c) Crowdfunding platforms

  4. What type of investors provide funding, mentorship, and resources to startups in exchange for equity or participation in a program?

    a) Angel investors

    b) Venture capital firms

    c) Banks

    d) Accelerators and incubators

    Answer: d) Accelerators and incubators

  5. What is the value of a startup before receiving external investment called?

    a) Pre-money valuation

    b) Post-money valuation

    c) Convertible note valuation

    d) Series A valuation

    Answer: a) Pre-money valuation

  6. Which method is commonly used to determine startup valuation by comparing it to similar companies in the industry?

    a) Discounted cash flow (DCF) method

    b) Comparable company analysis (CCA)

    c) Risk-adjusted return method

    d) Pre-money valuation method

    Answer: b) Comparable company analysis (CCA)

  7. What are Convertible Notes and SAFE commonly used for in startup financing?

    a) Buying equity immediately

    b) Providing long-term loans

    c) Converting into equity at a later financing round

    d) Selling equity to public investors

    Answer: c) Converting into equity at a later financing round

  8. What happens when a startup issues additional equity or securities, leading to a reduction in existing shareholders' ownership percentage?

    a) Market expansion

    b) Risk reduction

    c) Dilution

    d) Acquisition

    Answer: c) Dilution

  9. Which of the following is a common exit strategy for startups?

    a) Continuous fundraising

    b) Government grants

    c) Acquisition

    d) Low valuation

    Answer: c) Acquisition

  10. What role does startup valuation play in negotiating exit terms?

    a) Minimal role

    b) No role

    c) Moderate role

    d) Significant role

Answer: d) Significant role

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