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. How you get to vote






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






3. 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.






4. The way you buy stock






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






6. 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






7. 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






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






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






10. Term sheet for equity offering






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






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






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






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






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






16. 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.






17. 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.






18. Compound internal rate of return.






19. 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






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






21. 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.






22. 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






23. 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.






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






25. The act of one company taking over controlling interest in another company. Investors often look for companies that are likely candidates for this - because the acquiring firms are often willing to pay a premium to the market price for the shares.






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






27. The valuation of a company immediately after the most recent round of financing. For example - a venture capitalist may invest $3.5 million in a company valued at $2 million 'pre-money' (before the investment was made). As a result - the startup will






28. How much the company is worth before an investment






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






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






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






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






33. 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






34. The internal rate of return on an investment.






35. 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






36. 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






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






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






39. 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.






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






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






42. How you get out






43. A detailed document that outlines what you are going to do and how you are going to do it - including a clear and simple discussion of the idea; the management team - including full resumes; business strategy; marketing plan - including sales projec






44. 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






45. No double tax - Limited number of investors






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






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






49. 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.






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