Chapter 2, Section 2.1, Concept Check , Exercise 01
Page 44
What are the three types of startup firms?
What are the three types of startup firms?
Explanation
Following are the three types of startup firms:
- Salary-replacement firms are business prospects that allow their owners to earn an income that is comparable to the income levels of large firms. The examples may include retailers, restaurants, and so on.
- Lifestyle firms are business prospects that allow their owners to follow a specific lifestyle and at the same time, earn a reasonable income. These business prospects will be based on the owner's personal interests and may include ski instructions, tour guides, and so on.
- Entrepreneurial firms are business prospects that have the potential to provide high revenues, margins, and cash flows. They aim to seek high growth and a dominant market share by using substantial external financing.
Verified Answer
The three types of startup firms are; salary-replacement firms, lifestyle firms and entrepreneurial firms.
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