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. No double tax - Limited number of investors






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






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






4. The first round of capital for a start-up business. Seed money usually takes the structure of a loan or an investment in preferred stock or convertible bonds - although sometimes it is common stock. Seed money provides startup companies with the cap






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






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






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






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






9. 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.






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






11. 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.






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






13. 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






14. How you get to vote






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






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






17. 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.






18. 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.






19. The party that manages a limited partnership and is liable for the debts of the company






20. 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






21. 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






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






23. 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


24. How much the company is worth before an investment






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






26. 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






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






28. Cannot get other outside investors-No Shop






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






30. 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






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






32. 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.).






33. 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






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






35. 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.






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






37. 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






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






39. 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






40. The reorganization of a company's capital structure. A company may seek to save on taxes by replacing preferred stock with bonds in order to gain interest deductibility.






41. 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.






42. The internal rate of return on an investment.






43. Force sell of stock at a predetermined price. The rights by which the investor's preferred stock or subordinated debt 'converts' into common stock






44. 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.






45. Document between general and limited partnership of each fund spells out details of the partnership.






46. 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.






47. 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






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






50. 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.