MBAX 6860 - Leeds School of Business



MBAX 6860 – BOOTSTRAP TACTICS FOR ENTREPRENEURS SPRING 2007

MIDTERM EXAM STUDY QUESTIONS

FRIDAY, MARCH 16

WOLF 301

9:30am – 11:15am

NOTES:

• The exam is closed-book, closed-notes, and “closed-computer-files”

• You may use a computer to write this exam, if you desire, but may not refer to any files, information, or data on your computer.

• Use concepts and ideas from class and our guest speakers to frame your answers.

• The quality of your response is more important than quantity (e.g., length)

• Write logically and thoughtfully, with complete sentences and coherent paragraphs

• Please use (bullet, numbered) lists as appropriate

• For grading purposes, each question will start with a grade of “B” – excellent answers will increase this grade, poor answers will lower it, and good answers will leave it unchanged.

• Good Luck!

INTRODUCTION TO BOOTSTRAPPING

• What is "bootstrapping"?

• Why is bootstrapping necessary?

• Why is bootstrapping potentially desirable, even if venture funding is available?

Consider the assigned article "Start with Nothing"

• How does Gianforte define bootstrapping?  What should be the primary focus of a bootstrap entrepreneur?

• What does Gianforte mean when he says that "I think a lot of entrepreneurs think they need money to build the business faster when they actually haven't figured out the business equation yet."

BOOTSTRAP STARTUP

Consider Chris Hazlitt’s Presentation as well Week 2 Discussion Slides

• What are the advantages and disadvantages of the following legal forms of business?  When should each be used?

o Sole Proprietorship

o Partnership

o Limited Liability Company (LLC)

o Corporation

• What are the differences between an S-Corp and a C-Corp?  What are the limitations on an S-Corp?

• What is "piercing the corporate veil"? Why is it important not to do this?

• What are the tax implications of each legal form?

• What issues should you consider before and while you are naming your business?

BOOTSTRAP FOUNDERS

▪ What is the process you should implement when forming a team along with key things to keep in mind during this process?

▪ What should you consider when working with friends & family? If you do, what is most important?

Stock Options:

• What are stock options and how can they help a bootstrap entrepreneur?

• What are the pros and cons of offering stock options to founders?

• What are Incentive Stock Options (ISO or statutory options)? 

• What are Nonqualified Stock Options (NSO or nonstatutory options)? 

• What are the primary differences ISO and NSO options? 

• Which is probably most interesting to bootstrap entrepreneurs?  Why?

BOOTSTRAP INTELLIGENCE & RESEARCH

Consider class discussion, slides, and the assigned reading "What competitive intelligence is and is not"

• What is competitive intelligence?  What is it not?

• What are the purposes of competitive intelligence?

Consider the assigned reading "Competitive Intelligence on a Shoestring"

• What are good sources of free and cheap intelligence?

• Who should be doing competitive intelligence in a startup?

• How can a bootstrap entrepreneur enlist the free assistance of experts?

BOOTSTRAP MARKETING

Consider the class discussion slides, Mark Mitchell’s presentation and readings:

▪ Define marketing. What is considered the “best” marketing?

▪ Identify and discuss common symptoms of marketing failure.

Identify and discuss steps to creative marketing.

▪ Discuss marketing’s importance and how this function integrates into a company.

BOOTSTRAP FINANCE

Consider Wayne Greenberg’s Presentation:

▪ Identify government programs that are sources of funds for bootstrappers.

▪ Identify and discuss the 4 different forms of capital.

▪ What are some creative sources of funding?

Consider Class Discussion Slides as well as the assigned reading Twenty tips for finding money now:

▪ Identify and discuss sources of bootstrap funding. What are the advantages and disadvantages of each?

Consider Bhide’s article "Bootstrap Finance: The Art of Start-ups”:

▪ Identify and discuss 5 of the 7 axioms drawn from successful entrepreneurs.

BOOTSTRAP HR

Consider Cinda Daggett’s presentation:

• Identify and discuss some common pitfalls to avoid concerning bootstrap HR.

• What are the 3 key policies a bootstrapper should have in place?

• Identify and discuss Cinda’s recommendations in creating an amazing culture.

• Identify and discuss key elements to “successful bootstrap HR”.

Consider class discussion slides:

• Why are independent contractors attractive to bootstrappers compared with employees?

• What are some key differences between contractors and employees?

• Identify and discuss the steps to hiring.

BOOTSTRAP SELLING

Consider the assigned article "The truth about selling"

• In a startup company, who should be selling products or services?

• What is the role of top management in the sales process?

Consider class discussion slides:

• Identify and discuss secrets to bootstrap selling.

• Identify and discuss the 5-step selling process from both the customer and salesperson perspective.

Consider Jim Plouffe’s presentation:

• What are the 4 rules to selling?

• What are the 3 categories that prospects fall into?

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