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






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






3. How much the company is worth before an investment






4. 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.






5. These are government-chartered venture firms that can invest only in companies that are at least 51 percent owned by members of a minority group or person recognized by the rules that govern this to be economically disadvantaged.






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






7. The practice of a large company taking a minority equity position in a smaller company in a related field.






8. 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






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






10. 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






11. 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.).






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






13. An IPO that has met certain






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






15. 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






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






17. 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.






18. 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.






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






21. The way you buy stock






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






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






25. 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






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






27. 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






28. 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.






29. Date the LP's subscription is effective and they become partner






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






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






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






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






34. Cannot get other outside investors-No Shop






35. 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






36. 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.






37. How you get out






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






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






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






41. 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.






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






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






44. The equity of the company and some types of debts (subordinated debt) but generally not senior secured debt (bank loan)






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






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






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






48. 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






49. 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.






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