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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. 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.






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






3. 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.






4. 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






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






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






7. 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






8. 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






9. 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) ...






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






11. 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






12. Pre-money valuation plus the amount invested in the latest round






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






14. 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






15. Cannot get other outside investors-No Shop






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






17. A study of the background and financial reliability of the company - management team and industry.






18. How you get to vote






19. 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


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






21. 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






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






23. 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.






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






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






26. 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






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






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






29. 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






30. 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






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






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






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






34. 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






35. Allows the holder to choose whether a merge or sale will be treated as a liquidation event for the purpose of receiving the funds they are entitled to under the liquidation preferences of the term sheet






36. 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.).






37. How you get out






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






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






40. No double tax - Limited number of investors






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






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






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. 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. 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.






46. 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.






47. Compound internal rate of return.






48. 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.






49. 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






50. 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.