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






2. 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) ...






3. 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






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






5. 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






6. The final event to complete the investment - at which time all the legal documents are signed and the funds are transferred.






7. These are government-chartered venture firms that can invest only in companies that are at least 51 percent owned by members of a minority group or person recognized by the rules that govern this to be economically disadvantaged.






8. First to absorb losses. Represents common shareholders' investment in a company. It includes common stock value - retained earnings - capital surplus.






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






10. 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






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






12. An acquisition of a business using mostly debt and a small amount of equity. The debt is secured by the assets of the business.






13. Letter of intent summarizing the key legal and financial terms






14. The legal structure used by most venture and private equity funds. Usually fixed life investment vehicles. The general partner or management firm manages the partnership using policy laid down in a partnership agreement. The agreement also covers -






15. A form of equity ownership in a corporation that contains preferences over common stock - stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights






16. Funds provided to enable an enterprise to acquire another enterprise or product line or business.






17. Used to compute net worth as the difference between total assets and total liabilities. adjusted value up to reflect market value






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






19. Cannot get other outside investors-No Shop






20. The sale or exchange of a significant amount of company ownership for cash - debt - or equity of another company.






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






22. The amount to be paid when the company is liquidated or sold before any payments are made lower classes of investors. Not everyone gets paid equally






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






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






25. A business owned by stockholders who share in its profits but are not personally responsible for its debts






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






27. Term sheet for equity offering






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






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






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






31. The sale of the assets of a portfolio company to one or more acquirers when venture capital investors receive some of the proceeds of the sale.






32. The reorganization of a company's capital structure. A company may seek to save on taxes by replacing preferred stock with bonds in order to gain interest deductibility.






33. 'I will buy stock at price we negotiate'






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






35. 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.






36. Shares acquired in a private placement are considered restricted shares and may not be sold in a public offering absent registration - or after an appropriate holding period has expired. Non-affiliates must wait one year after purchasing the shares






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






38. Individuals that provide venture capital to seed or early stage companies. They can usually add value through their contracts and expertise.






39. Raising funds by offering ownership in a corporation through the issuing of shares of a corporation's common or preferred stock.






40. 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






41. Funds provided to enable operating management to acquire a product line or business - which may be at any stage of development - from either a public or private company.






42. Purchase of stock in a company from a share holder - rather than purchasing stock directly from the company.






43. A type of equity ownership in a corporation - stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights.






44. A financial institution specializing in the provision of equity and other forms of long-term capital to enterprises - usually to firms with a limited track record but with the expectation of substantial growth. The venture capitalist may provide bot






45. 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






46. How much the company is worth before an investment






47. How you get out






48. 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






49. How fast you can turn it into cash - termination of a business operation by using its assets to discharge its liabilities






50. Also called a 'Cap Table' - this is a table showing the total amount of the various securities issued by a firm. This typically includes the amount of investment obtained from each source and the securities distributed -- e.g. common and preferred s