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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 sale or exchange of a significant amount of company ownership for cash - debt - or equity of another company.






2. An IPO that has met certain






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






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






6. 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.






7. 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






8. 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






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






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






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






12. How much the company is worth before an investment






13. 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






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






15. 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


16. 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






17. 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






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






19. 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.






20. 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






21. 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.






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






23. 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






24. The way you buy stock






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






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. 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.).






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






29. 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






30. 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.






31. 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.






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






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






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






35. 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






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






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






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






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






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






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






42. Term sheet for equity offering






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






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






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






46. 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.






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






48. 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






49. Cannot get other outside investors-No Shop






50. 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