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Venture Capital

Subject : industries
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. Used to compute net worth as the difference between total assets and total liabilities. adjusted value up to reflect market value






2. 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.






3. How much the company is worth before an investment






4. 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.






5. 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.






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






7. The way you buy stock






8. 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


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






10. The sale or distribution of a stock of a portfolio company to the public for the first time. IPOs are often an opportunity for the existing investors (often venture capitalists) to receive significant returns on their original investment. During peri






11. 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






12. 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






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






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






15. 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) ...






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






17. 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






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






19. 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






20. 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.






21. An agreement issued by entrepreneurs to potential investors to protect the privacy of their ideas when disclosing those ideas to third parties.






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






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






24. 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






25. 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.






26. 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






27. 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






28. 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






29. The internal rate of return on an investment.






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






31. 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






32. 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.






33. Compound internal rate of return.






34. 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.






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






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






37. 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.






38. Cannot get other outside investors-No Shop






39. 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






40. 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.






41. 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






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






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






44. A form of equity ownership in a corporation that contains preferences over common stock - stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights






45. 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






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






47. 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.






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






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






50. An IPO that has met certain