NPTEL Entrepreneurship Essentials Week 10 Assignment Answers 2025
1. Which of the following analogy is not correct about raising money through debt, preference shares, and equity?
a. Preference share holder’s voting right is limited to their percentage holding in total preference shares of the company.
b. Debt is repayable whereas there is no such provision in the case of equity.
c. Money in the form of debt requires to be secured by providing collaterals in most cases, whereas, no such security is to be provided in the case of equity.
d. Interest is payable in the case of debt, whereas there is no such requirement in the case of equity.
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2. A business angel invests 100 million in a startup for a pre-money valuation of 400 million. The angel has 2X liquidity and participatory preference. The company later has a liquidity event (is sold) for 800 million. How much money the founders will receive?
a. 600 million
b. 480 million
c. 640 million
d. 360 million
Answer :-
3. Choose the correct option. What is the difference between primary and collateral securities?
a. Primary security is a charge on the assets created out of the loan and Collateral security relates to a charge on assets other than those created out of the loan.
b. Collateral security is a charge on the assets created out of the loan and primary security relates to a charge on assets other than those created out of the loan.
c. Primary security is a charge on liquid assets whereas collateral securities is a charge on illiquid assets.
d. Primary securities are the assets of the co-founders whereas collateral securities are the assets of the company.
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4. A business angel invests 300 million in a startup at a pre-money valuation of 400 million in 2X liquidity and non-participatory preference shares. The company later has a liquidity event (meaning that the company is sold) for 1,000 million. How much money the founders will receive? (All figures are in Rupees million)
a. 600 million
b. 400 million
c. 800 million
d. 300 million
Answer :-
5. Which of the following is true?
a. Payment of dividend is mandatory for preference shares at pre-agreed rate, whereas payment of the dividend is optional for equity share
b. Preference equity shareholders’ voting rights are proportional to the amounts invested.
c. In the case of preference shares, the payment of dividends or no dividends is the prerogative of the management/owners of the company.
d. The rate of dividend payable in the case of equity share is always proportional to the net profit.
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6. A new venture raises 360 million Rupees at a pre-money valuation of 540 million Rupees. What is the post-money shareholding percentage of the founders?
a. 60%
b. 70%
c. 75%
d. 80%
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7. A company raises 500 million rupees at a post-money valuation of 1000 million rupees in the form of simple participating preference shares with no liquidation preference. A few years later the company realizes a liquidity event and is acquired for 5000 million rupees. How much money the founders would receive?
a. 3500 million rupees
b. 4000 million rupees
c. 2500 million rupees
d. 1500 million rupees
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8. Choose the right statement
a. Long-term loan from banks is for the working capital requirement.
b. The short-term loan from banks is for the procurement of fixed assets.
c. Only long-term loan from banks is related to equity dilution.
d. Long-term loan from banks is repayable with installments along with interest.
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9. A company raises 150 million rupees at a pre-money valuation of 450 million rupees in the form of a simple participating preference share with 3x liquidation preference. A few years later the company realizes a liquidity event and is acquired for 1000 million rupees. How much money the founders receive
a. 514.5 million
b. 655.0 million
c. 412.5 million
d. 523.6 million
Answer :-
10. A business angel invests 300 million in a venture at a pre-money valuation of 700 million in participating preference shares (no liquidation preference). The venture also raises funds of 100 million from a bank as a long-term loan and the outstanding balance in the loan account is 100 million (the company has to repay 100 million to the bank). At this point, the company is liquidated for 350 million. How much money the founders will receive if the investor continues to hold the preference shares?
a. 175 million
b. 0 million
c. Negative (-) 50 million (Founders have to pay 50 million to the angel.
d. 250 million
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