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Starting a Business for Engineers and Scientists


Quiz Questions

1.Our standard of living depends on what we produce, and engineers and scientists, more than any other group, can create wealth for society because they are directly coupled to the engines of productivity.
True
False
2. In the past, engineers obtained job security by joining a stable company and completing their assignments with dedication and excellence.
True
False
3.Today, we obtain job security by being competitive in the job market and by making sure our actions directly contribute to the company’s success. That means knowing who the company’s real customers are, what problems they need solved, and how our actions affect other parts of the company.
True
False
4.Certainly in a high-technology market, business decisions are best made by people who understand both technology and business. In general, I think engineers can learn about business much more easily than business people can learn about technology.
True
False
5.Most books, and articles about starting a business, and also most people’s concepts about starting a business, pertain to the venture-capital model. In that model, you identify an opportunity in a large and growing market, hire a complete team of experienced and successful managers, raise a lot of money, and spend it to accelerate your business development.
True
False
6.The low-risk model is a common sense approach to business. You start small, build a solid foundation, and learn the ropes as you grow. You raise a small amount of money from friends, family, or other entrepreneurs. You learn to watch cash flow and to spend money wisely – if you run out of money, you’re out of business. You hire the team appropriate for building a small company now and hire more experienced people as you grow.
True
False
7.Venture-backed businesses have high failure rates – perhaps only about 10% of them become big successes. This failure rate is partially due to the fact that the winners have to compensate for the losses sustained by the other 90%. For that reason, venture capitalists tend to have high expectations for the return on their investment, typically 50% per year.
True
False
8.Venture capitalists examine risk in four areas: management, technology, regulatory issues, and the market.
True
False
9.Iris Medical started on the high risk approach and used a venture capital firm right from start
True
False
10.A company formed in a low risk approach, cannot be flexible, informal or idealistic. Since it has to stay with the plans of the capital venture company.
True
False