SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
Venture Capital
Start Test
Study First
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. 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.
Dividends
equity financing
exit route
secondary public offering
2. 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
private investment in public equities (PIPE)
Preferred Stock
Term Sheet
closing
3. 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.
Bootstrapping
Capital Commitment
leverage buy-out(LBO)
management buy-out (MBO)
4. 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
seed capital
Preferred Stock
secondary purchase
Post-Money Valuation
5. 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
benchmarks
Limited Partnership Agreement
Elevator Pitch
Confidentiality
6. 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.
Pre-Money Valuation
Seed Money
return on investment (ROI)
syndication
7. 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
due diligence
institutional investors
Book Value
Market Capitalization
8. 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
Liquidation Preference
private investment in public equities (PIPE)
lock-up period
Limited Partnership Agreement
9. Are the means by which an investor preserves its percentage of ownership in the company without having to make a new investment.
Conversion Rights
portfolio compaay
Bridge Financing
Anti-Dilution Protections
10. 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
Lead Investor
seed capital
Angel Financing
PPM
11. The investigation and evaluation of a management team's characteristics - investment philosophy - and terms and conditions prior to committing capital to the fund.
private investment in public equities (PIPE)
Dividends
due diligence
Pre-Money Valuation
12. No double tax - Limited number of investors
Bootstrapping
S Corporation
Warrants
secondary public offering
13. 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
recapitalization
Series A Preferred Stock
Liquidation
benchmarks
14. When an investor sells a stock - bond or mutual fund at a higher price than he or she paid for it.
capital gain
Equity
secondary public offering
Term Sheet
15. An agreement issued by entrepreneurs to potential investors to protect the privacy of their ideas when disclosing those ideas to third parties.
NDA (Non-disclosure agreement)
Liquidation
IRR
bridge loans
16. The event in which the company is liquidated or sold (bankruptcy or sale to a public company)
Series A Preferred Stock
Deal Structure
Liquidity Event
Senior Stock
17. 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) ...
fund of funds
Initial Public Offering
Market Capitalization
Pre-Money Valuation
18. 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
Dividends
Pre-Money Valuation
private equity
seed capital
19. Funds provided to enable an enterprise to acquire another enterprise or product line or business.
Preferred Stock
Internal Rate of Return
buyout
liquidation
20. The final event to complete the investment - at which time all the legal documents are signed and the funds are transferred.
turnaround
closing
Angel Financing
Private Equity
21. Assets are subject to double taxation - Unlimited number of investors
S Corporation
Pre-Money Valuation
lead investor
C Corporation
22. 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
Private Equity
benchmarks
Closing
venture capital
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
small business investment companies (SBIC)
Private Equity
No Shop/Confidentiality
Common Stock
24. The rate at which a company expends net cash over a certain period - usually a month.
bridge loans
Venture Capitalist
Common Stock
Burn Rate
25. 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
Venture Capitalist
Angel Financing
IPO (Initial Public Offering)
Common Equity
26. These are short-term financing agreements that fund a company's operation until it can arrange a more comprehensive longer-term financing. The need for these arises when a company runs out of cash before it can obtain more capital investment though l
bridge loans
private investment in public equities (PIPE)
equity financing
Term Sheet
27. Document between general and limited partnership of each fund spells out details of the partnership.
debt financing
going private
Limited Partnership Agreement
Angel Financing
28. 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.
Qualified IPO
management buy-in (MBI)
term sheet
angel investors
29. 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.
mezzanine financing
Limited Partnership Agreement
Seed Money
NDA (Non-disclosure agreement)
30. Term sheet for equity offering
capital under management
Term Sheet
Series A Preferred Stock
liquidation
31. Cannot get other outside investors-No Shop
No Shop/Confidentiality
Initial Public Offering
Business Plan
Burn Rate
32. 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.
Outstanding Stock
Due Diligence
Equity
term sheet
33. Purchase of stock in a company from a share holder - rather than purchasing stock directly from the company.
equity offerings
secondary purchase
Bridge Financing
recapitalization
34. This refers to a synopsis of the key points of a business plan.
Senior Stock
Post-Money Valuation
executive summary
management buy-out (MBO)
35. The valuation of a company prior to a round of investment. This amount is determined by using various calculation models - such as discounted P/E ratios multiplied by periodic earnings or a multiple times a future cash flow discounted to a present c
private equity
secondary purchase
Pre-Money Valuation
return on investment (ROI)
36. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything
Membership Interest
Senior Stock
Pre-Money Valuation
NDA (Non-disclosure agreement)
37. 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.
follow-on
management buy-out (MBO)
Angel Financing
minority enterprise small business investment companies (MESBICS)
38. Pre-money valuation plus the amount invested in the latest round
Post-money
Liquidity Event
IPO (Initial Public Offering)
Burn Rate
39. Capital raised for a private company from independently wealthy investors. This capital is generally used as seed financing.
PPM
limited partnerships
Angel Financing
Pre-Money Valuation
40. The equity ownership in a LLC. May be either common or preferred. Partnership agreement
Due Diligence
IPO (Initial Public Offering)
limited partnerships
Membership Interest
41. The practice of a large company taking a minority equity position in a smaller company in a related field.
corporate venturing
mezzanine financing
capital gain
Deal Structure
42. 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
Business Summary
Seed Money
management buy-in (MBI)
IPO (Initial Public Offering)
43. 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.
Voting Rights
turnaround
Elevator Pitch
closing
44. The party that manages a limited partnership and is liable for the debts of the company
Pre-money valuation
General Partner (GP)
Preferred Stock
Post-money
45. 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.
due diligence
Preferred Stock
IRR
IPO (Initial Public Offering)
46. 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
follow-on
Cash-out election
limited partnerships
Warrants
47. 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
Membership Interest
exit
debt financing
IRR
48. 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
exit
series a preferred stock
Post-money
management buy-in (MBI)
49. How you get to vote
Angel Financing
term sheet
Voting Rights
Confidentiality
50. Purchase of a business by an outside team of managers who have found financial backers and plan to manage the business actively themselves.
Lead Investor
management buy-in (MBI)
mezzanine financing
Restricted Stock