CHAPTER 5

Question 1

A conceptual structure that explains how a business generates money.

Answer 1

REVENUE MODEL

Question 2

6 TYPES OF REVENUE MODELS

Answer 2

COMMERCIAL AND RETAIL
SUBSCRIPTION AND USAGE FEE
lICENSING
AUCTION AND BIDS
ADVERTISING
TRANSACTION AND INTERMIDIATION

Question 3

In this model, physical products are sold in the market either through business to business (B2B) or business to consumers (B2C).

Answer 3

COMMERCIAL AND RETAIL

Question 4

Selling physical goods, digital products, service sold per unit, service with fixed price, and sale of service for future use.

Answer 4

COMMERCIAL AND RETAIL

Question 5

Involves charging customers to gain continuous access to a product or service. (Netflix, HBO, Disney Plus, Spotify and VT)

Answer 5

SUBSCRIPTION AND USAGE FEES

Question 6

Charges customers fees on the basis of how often goods or services are used.

Answer 6

SUBSCRIPTION AND USAGE FEES

Question 7

Gives permission to other parties to use protected intellectual property.

Answer 7

LICENSING

Question 8

A It allows the general public to bid for the offered product and sell it to the highest bidder. B considered to be a subset of Auction. There exists a competition between bidders.

Answer 8

AUCTION AND BIDS

Question 9

DP businesses, set flexible prices for products or services based on current market demands.

Answer 9

AUCTION AND BIDS

Question 10

Amount of revenue gained through advertising products and services.

Answer 10

ADVERTISING

Question 11

product, brand or service is promoted to a viewership in order to attract interest, engagement, and sales.

Answer 11

ADVERTISEMENT

Question 12

Revenue in this model comes from transactions that involve the main profit-making activity of a business.

Answer 12

TRANSACTIONS AND INTERMEDIATION

Question 13

Describes the different methods by which third parties can generate money.

Answer 13

TRANSACTION AND INTERMEDIATION

Question 14

business produce money out of its various business activities. The more products or services being sold; the more money a business can produce which provide higher level of revenue.

Answer 14

REVENUE DRIVERS

Question 15

may come from online sales, retall sales in bricks, and wholesale to other business,

Answer 15

REVENUE CHANNEL

Question 16

small coffee shop, cakes and pastry sales.
are most productive and return that delivering and allows you to make decisions.

Answer 16

REVENUE STREAMS

Question 17

an entrepreneur ought to Identify the most profitable product/services.

Answer 17

PRODUCT AND SERVICE SPLIT

Question 18

The more you can dive into your metrics and find the most productive and adaptable products and services, the greater your ability is to provide constant and evolving revenue for the business.

Answer 18

PRODUCT AND SERVICE SPLIT

Question 19

involves the choice of selling big quantity of products/services at low margin or small quantity at a high margin.

Answer 19

VALUE VS VOLUME

Question 20

A direct cause of cost and its effect on the total cost incurred.

Answer 20

COST DRIVER

Question 21

A model or method used to establish the best price for a product or service.

Answer 21

PRICING STRATEGIES

Question 22

is revenue growth in the short term. Startups should pursue this when there are no clear differences in customer segments willingness to pay, and when the optimal short term and long term prices are equal.

Answer 22

MAXIMIZATION (REVENUE GROWTH)

Question 23

is uses low prices to enter a new market or to launch a new product or service,

Answer 23

PENETRATION (MARKET SHARE)

Question 24

is the riskiest type of pricing strategy if not planned and implemented prudently.

Answer 24

PENETRATION (MARKET SHARE)

Question 25

used by strong competitive advantage, they enter the market with high-priced product and services.

Answer 25

SKIMMING (PROFIT MAXIMIZATION)

Question 26

is involves calculating all the costs involved in manufacturing or delivering the product or service.

Answer 26

COST-LED PRICING

Question 27

is involves setting your price based on the amount of investment.

Answer 27

TARGET-RETURN PRICING

Question 28

This is a pricing strategy used by e-commerce experts that helps them set the price of a product based on the expected rate of return of their business.

Answer 28

TARGET-RETURN PRICING

Question 29

pricing your product based on how it benefits the customer. method that uses the perception of the customers on the worth or value of a product and/or service for pricing.

Answer 29

VALUE-BASED PRICING

Question 30

a situation in which an entrepreneur starts a company with little capital, relying on money other than outside investments.

Answer 30

BOOTSRAPPING

Question 31

personal savings or borrow money from relatives and friends as a startup money.

Answer 31

LOOK FOR SEED MONEY

Question 32

is a version of the product that's good enough for others to see and use, but remains a work in progress nonetheless.

Answer 32

MINIMUM VARIABLE PRODUCT

Question 33

may obtain money from preorders and use this to start its operation.

Answer 33

USE CUSTOMER MONEY TO GROW

Question 34

involves obtaining work, information, or opinions from a large group of people who submit their data via the Internet, social media, and smartphone apps.

Answer 34

CROWD SOURCING

Question 35

Refers to getting work, information, opinions from a big group of individuals who give their data via social media platforms, web search engine and even smartphone apps.

Answer 35

CROWDSOURCING

Question 36

the process of generating capital through the sale of shares.

Answer 36

EQUITY FINANCING

Question 37

STAGES OF EQUITY FINANCING

Answer 37

PRE-SEED FUNDING SEED FUNDING EARLY STAGE INVESTMENT LATER STAGE INVESTMENT MEZZANINE FINANCING

Question 38

raising money for an individual or company by collecting donations from a large number of individuals to fund a startup business.

Answer 38

CROWD FUNDING

Question 39

This crowdfunder funds without expecting any return. They are typically used to support disaster relief, famine, education programmes, etc.

Answer 39

DONATION- BASED

Question 40

This crowdfunder transfers funds with the expectation, which may be in the form of a token gift or an early/exclusive release of a product or service offered by the startup company.

Answer 40

REWARD BASED

Question 41

The fastest growing type of crowdfunding has a 73 percent market share. This crowdfunder to individuals or companies in return for interest. While there are platforms exclusively targeting socially-oriented lending, the majority operate as commercial platforms in direct competition with other financial intermediaries.

Answer 41

LENDING-BASED

Question 42

This crowdfunder purchases in a company. Regardless of whether it's manufacturing equipment or a patent, it can be thought of as something that can generate cash flow, reduce expenses, or increase sales in the future.

Answer 42

EQUITY-BASED

Question 43

A company source out funds by offering shares of the company to the public.

Answer 43

INITIAL PUBLIC OFFERING

Question 44

the first place an investor or analyst will look this type of financial statement. This statement shows the performance of the business throughout each period, displaying sales revenue at the very top. The statement then deducts the cost of goods sold (COGS) to find gross profit.

Answer 44

INCOME STATEMENT

Question 45

This statement then displays the changes in each major account from period to period. Net income from the income statement flows into the this type of financial statement as a change in retained earnings (adjusted for payment of dividends).

Answer 45

BALANCE SHEET

Question 46

This type of financial statement displays the company's assets, liabilities, and shareholders' equity at a point in time. As commonly known, assets must equal liabilities plus equity. The asset section begins with cash and equivalents, which should equal the balance found at the end of the cash flow statement.

Answer 46

BALANCE SHEET

Question 47

This type of financial statement then takes net income and adjusts it for any non-cash expenses. Then, using changes in the balance sheet, usage and receipt of cash is found.

Answer 47

CASH FLOW STATEMENT

Question 48

statement displays the change in cash per period, as well as the beginning balance and ending balance of cash.

Answer 48

CASH FLOW STATEMENT

Question 49

They are individuals or larger groups that make available financial backing at a nearly phase of the business at advantageous terms and do not typically participate in the management of the venture.

Answer 49

ANGEL INVESTOR

Question 50

A person who can confirm the soundness of the entrepreneur's idea being very familiar with the business.

Answer 50

IDEA INVESTOR

Question 51

They are investors who provide money for the business only after the company has been operating successfully for some years and they feel that it is already an established one.

Answer 51

VENTURE CAPITALIST

Question 52

large companies that invest in private companies to provide them with the necessary funding. The investment is usually created to establish a strategic partnership between the two businesses.

Answer 52

CORPORATE INVESTOR