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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. 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






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






4. 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






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






6. Cannot get other outside investors-No Shop






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






8. 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






9. 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.






10. 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.






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






12. 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.






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






14. 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






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






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






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






18. 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) ...






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






20. 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






21. 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






22. An IPO that has met certain






23. 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






24. 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






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






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






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






28. 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.






29. Compound internal rate of return.






30. 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.






31. 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.






32. These are equity securities of companies that have not 'gone public' (in other words - companies that have not listed their stock on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are no






33. The valuation of a company prior to a round of investment. This amount is determined by using various calculation models - such as discounted P/E ratios multiplied by periodic earnings or a multiple times a future cash flow discounted to a present c






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






35. 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.).






36. 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






37. How you get out






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






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






40. 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






41. The internal rate of return on an investment.






42. 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.






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






44. 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.






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






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






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






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






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






50. 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.