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






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






3. 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






4. The way you buy stock






5. Cannot get other outside investors-No Shop






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






7. Selling an interest in your business to an outside party to raise money.






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






9. 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) ...






10. 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






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






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






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






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






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






16. 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.






17. 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.






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






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






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






21. 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.






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






23. 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






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






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






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






27. 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






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






29. 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.






30. 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.






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






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






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






34. No double tax - Limited number of investors






35. 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






36. 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






37. 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.






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. 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






40. How you get to vote






41. 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.






42. 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






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






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. An IPO that has met certain






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






47. 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






48. Term sheet for equity offering






49. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything






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