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Venture Capital

Subject : industries
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. The total dollar value of all outstanding shares. Computed as shares multiplied by current price per share. Prior to an IPO - market capitalization is arrived at by estimating a company's future growth and by comparing a company with similar public






2. The party that manages a limited partnership and is liable for the debts of the company






3. Investments by a private equity fund in a publicly traded company - usually at a discount.






4. The repurchasing of all of a company's outstanding stock by employees or a private investor. As a result of such an initiative - the company stops being publicly traded. Sometimes - the company might have to take on significant debt to finance the






5. Corporation's first offer to sell stock to the public - Allows for anyone to buy stock and now falls under the SEC (No longer accredited investor) ...






6. The first round of stock offered during the seed or early stage round by a portfolio company to the venture investor or fund. This stock is convertible into common stock in certain cases such as an IPO or the sale of the company. Later rounds of pref






7. Assets are subject to double taxation - Unlimited number of investors






8. A brief statement covering the main points that includes a discussion of management - profits - strategic position - and exit plan






9. The total value of the company immediately prior to the latest round of financing






10. Cash - stock and other property by the company to the investor in the investor's capacity as a stock - payment to owner for their appreciation






11. The rate at which a company expends net cash over a certain period - usually a month.






12. The sale or distribution of a stock of a portfolio company to the public for the first time. IPOs are often an opportunity for the existing investors (often venture capitalists) to receive significant returns on their original investment. During peri






13. Don't talk to the market about the company






14. An IPO that has met certain






15. This refers to a synopsis of the key points of a business plan.






16. The first round of capital for a start-up business. Seed money usually takes the structure of a loan or an investment in preferred stock or convertible bonds - although sometimes it is common stock. Seed money provides startup companies with the cap






17. The amount of common shares of a corporation which are in the hands of investors. It is equal to the amount of issued shares less treasury stock.






18. When an investor sells a stock - bond or mutual fund at a higher price than he or she paid for it.






19. Unsecured debt - junior to senior debt (bank loan) and is senior to common stock and preferred. Gets paid last






20. The equity ownership in a corporation. Also has basic voting rights






21. Allows the holder to choose whether a merge or sale will be treated as a liquidation event for the purpose of receiving the funds they are entitled to under the liquidation preferences of the term sheet






22. Partner who does not share in a firm's management and is liable for its debts only to the limits of said partner's investment






23. The amount of this available to a management team for venture investments.






24. No double tax - Limited number of investors






25. A non-binding agreement setting forth the basic terms and conditions under which an investment will be made. This is a template that is used to develop more detailed legal documents.






26. The act of one company taking over controlling interest in another company. Investors often look for companies that are likely candidates for this - because the acquiring firms are often willing to pay a premium to the market price for the shares.






27. These are equity securities of companies that have not 'gone public' (in other words - companies that have not listed their stock on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are no






28. A unit of ownership of a corporation. In the case of a public company - the stock is traded between investors on various exchanges. Owners of common stock are typically entitled to vote on the selection of directors and other important events and in






29. The method by which an investor will realize an investment.






30. The rate of return or profit that an investment is expected to earn.






31. An investment vehicle designed to invest in a diversified group of investment funds.






32. The company or entity into which a fund invests directly.






33. This refers to obtaining capital from investors or venture capital sources.






34. These are performance goals against which a company's success is measured. Often - they are used by investors to help determine whether a company will receive additional funding or whether management will receive extra stock. Sometimes management wi






35. The value at which an asset is carried on a balance sheet (the cost of the item)






36. This word is used to describe businesses that are in trouble and whose management will cause the business to become profitable so they are no longer in trouble.






37. How you get out






38. Money that business owners must pay back with interest. There are myriad types of these - from simple commercial loans to bridge/swing loans in which a lender makes a short-term loan in anticipation of equity financing at a later stage in the develo






39. Date the LP's subscription is effective and they become partner






40. The period an investor must wait before selling or trading company shares subsequent to an exit. Usually in an initial public offering this period is determined by the underwriters.






41. The investigation and evaluation of a management team's characteristics - investment philosophy - and terms and conditions prior to committing capital to the fund.






42. The valuation of a company immediately after the most recent round of financing. For example - a venture capitalist may invest $3.5 million in a company valued at $2 million 'pre-money' (before the investment was made). As a result - the startup will






43. The event in which the company is liquidated or sold (bankruptcy or sale to a public company)






44. Financing for a company expecting to go public usually within 6-12 months; usually so structured to be repaid from proceeds of a public offerings - or to establish floor price for public offer.






45. Means of financing a small firm by employing highly creative ways of using and acquiring resources without raising equity from traditional sources or borrowing money from the bank.






46. An extremely concise presentation of an entrepreneur's idea - business model - company solution - marketing strategy - and competition delivered to potential investors. Should not last more than a few minutes - or the duration of an elevator rid






47. An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.






48. Capital raised for a private company from independently wealthy investors. This capital is generally used as seed financing.






49. A subsequent investment made by an investor who has made a previous investment in the company - generally a later stage investment in comparison to the initial investments.






50. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity