Test your basic knowledge |

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. 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






2. 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 -






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






4. An IPO that has met certain






5. 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.






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






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






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






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






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






11. The residual ownership in a company like a corporation or LLC 51%=control






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






13. 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.






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






15. 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.






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






17. 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






18. A security with limits on its transferability. Usually issued in connection with a private placement






19. 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) ...






20. This refers to a public offering subsequent to an initial public offering. A secondary public offering can be either an issuer offering or an offering by a group that has purchased the issuer's securities in the public markets.






21. 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






22. The maximum amount of cash that a partner is required to contribute under the terms






23. These are lending and investment firms that are licensed by the federal government. The licensing enables them to borrow from the federal government to supplement the private funds of their investors. Some of these funds engage only in making loans t






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






25. 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.






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






27. Cannot get other outside investors-No Shop






28. 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.






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






30. 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






31. 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






32. 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.






33. A detailed document that outlines what you are going to do and how you are going to do it - including a clear and simple discussion of the idea; the management team - including full resumes; business strategy; marketing plan - including sales projec






34. Are the means by which an investor preserves its percentage of ownership in the company without having to make a new investment.






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






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






37. 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






38. The process whereby a group of venture capitalists will each put in a portion of the amount of money needed to finance a small business.






39. A request from the GPs requiring each limited partner to deliver a portion of their capital commitment. Usually specified as a percentage of the capital commitment


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






41. 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






42. Equity securities of companies that have not 'gone public' (are not listed on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are not listed on an exchange - any investor wishing to sell






43. The way you buy stock






44. How much the company is worth before an investment






45. A study of the background and financial reliability of the company - management team and industry.






46. 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






47. 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






48. How you get out






49. An Agreement made between the investor and the company defining the rights and obligations of the parties involved. The process by which one arrives at the final term and conditions of the investment.






50. It refers mainly to insurance companies - pension funds and investment companies collecting savings and supplying funds to markets - but also to other types of institutional wealth (e.g. endowments funds - foundations etc.).