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. 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






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






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






4. 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






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






6. 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.






7. 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






8. 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






9. A limited amount of equity or short-term debt financing typically raised within 6-18 months of an anticipated public offering or private placement meant to 'bridge' a company to the next round of financing.






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






11. 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






12. Purchase of a business by an outside team of managers who have found financial backers and plan to manage the business actively themselves.






13. Compound internal rate of return.






14. 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.






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






16. 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






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. 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






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






20. 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 -






21. 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






22. The investor who leads a group of investors into an investment. Usually one venture capitalist will be this when a group of venture capitalists invest in a single business.






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






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






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






26. 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






27. 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.






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






29. 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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


30. 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






31. 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






32. 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.






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






34. 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






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






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






37. 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.






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






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






40. 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






41. Term sheet for equity offering






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






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






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






45. 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






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






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






48. 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






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






50. 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.