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. 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.






2. 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






3. 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






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






5. Issue of shares of a company to the public by the company (directly) for the first time.






6. How much the company is worth before an investment






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






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






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






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






11. Cannot get other outside investors-No Shop






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






13. An agreement issued by entrepreneurs to potential investors to protect the privacy of their ideas when disclosing those ideas to third parties.






14. 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






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






16. A class of capital stock that may pay dividends at a specified rate and that has priority over common stock in the payment of dividends and the liquidation of assets. Many venture capital investments use preferred stock as their investment vehicle. T






17. 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






18. Also known as a bell cow investor. Member of a syndicate of private equity investors holding the largest stake - in charge of arranging the financing and most actively involved in the overall project






19. Money used to purchase equity-based interest in a new or existing company. A venture capitalists return usually comes from preferred stock - a share of profits - royalties or capital appreciation of common stock. Most venture capitalists look for c






20. 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

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






22. 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.






23. 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






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






25. Pre-money valuation plus the amount invested in the latest round






26. 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






27. 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






28. 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






29. How you get to vote






30. The equity ownership in a LLC. May be either common or preferred. Partnership agreement






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






32. Money used to purchase equity-based interest in a new or existing company. A venture capitalists return usually comes from preferred stock - a share of profits - royalties or capital appreciation of common stock. Most venture capitalists look for c






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






34. How you get out






35. No double tax - Limited number of investors






36. 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






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






38. An IPO that has met certain






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






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






41. 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






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






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






44. 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.






45. 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) ...






46. The way you buy stock






47. Compound internal rate of return.






48. 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.






49. 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






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