Supply Chain Management
Where the entrepreneur went to college
An entrepreneur’s previous accomplishments
The potential size of the market that the entrepreneur is chasing
The size of the entrepreneur’s business at the time of investing
Wind and solar power
Shift from plasma TVs to LED TVs
Shift from Microsoft to Google
Shift from personal computers to mobile communications (smart phones and tablets)
Be able to forget about your mistakes quickly so you don’t miss the next opportunity that comes along
Dwell on all of your mistakes to be sure that they never happen again; be cautious in investing in companies in the future because you don't want another company to fail.
Stop investing for a long time so you can adequately figure out what went wrong
Only invest in companies that you know will succeed
The fiscal cliff is a massive reduction in tax rates scheduled to take effect on January 1, 2013. If this happens the US budget deficit will balloon and create a crisis.
Tax increases and significant reductions in government expenditures in the US which will occur on January 1, 2013 (and likely lead to economic weakness if Congress does not act).
The need to address the budgetary requirements of Obamacare and new initiatives around clean energy. Democrats want action on these topics and Republicans are stalling. Without action, Obamacare will fail and the price of oil will shoot through the roof.
The impasse between Democrats and Republicans regarding how to solve the Medicare and Social Security deficits. These deficits are looming and will cause recessionary pressures in 2013 if not addressed immediately.
Stock market will rise
Stock market will drop
The price Frank’s pays for its Oak and Mahogany lumber, two materials critical to making most of Frank’s products, dropped dramatically in 2012.
Frank’s has retail stores in 22 cities and was the largest furniture store in each of those cities in 2011. In 2012, Frank’s key competitor, Ikea, opened stores in six of the 22 cities in which Frank’s operates.
After 20 years of offering tables, chairs, sofas and bookshelves, in 2012, Frank’s began offering bedroom furniture as well (beds and dressers). Customers loved these new products.
Frank’s began offering free home delivery. This adds meaningful costs to each sale, but customers are happier. So far, this added benefit to customers does not seem to be driving more revenue.
More information is needed.
Earnings dropped roughly in half
Earnings increased, more than doubling
Earnings increased by roughly 50%
More information is required
Roughly $60 per share
Roughly $90 per share
None of the above
None, the stock will likely go down
10-20% annual returns
20-40% annual returns
At least a few percentage points better than US Treasury Bonds
5-10% since the big successes will be offset by some investments going to zero
The company’s in which they invest pay them for their help
They get a share (percentage) of the capital gains (or profits) when a company in which they invest achieves a “liquidity” event (IPO or sale)
They do not worry about making money since most venture capitalists do it because they love working with entrepreneurs
D. When company’s in which they invest fail, the company has to pay the Venture Capital firm for all its hard work up to that point
They take risk—invest early, before they can truly know the company will be successful
They fund losses before the company has revenue and profits
They only invest in the companies they know will be successful
They hope the winners will make up for the losers
It is pretty easy since most start-up companies grow to be big, valuable businesses
The rates of return from a venture capital fund are highly predictable and allow the retirement fund to grow
Retirement funds invest over long periods of time and, though risky in the short term, good venture capital firms earn higher returns than most other types of investments
Venture firms are highly focused on investing in companies that will improve education
Teachers are firm believers in investing in new technology