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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. This refers to a public offering subsequent to an initial public offering. A secondary public offering can be either an issuer offering or an offering by a group that has purchased the issuer's securities in the public markets.






2. 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.






3. 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






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






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






6. 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






7. How you get out






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






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






10. 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.






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






12. 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






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






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






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






16. 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






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






18. First to absorb losses. Represents common shareholders' investment in a company. It includes common stock value - retained earnings - capital surplus.






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






20. 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






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






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






23. 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.).






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






25. 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






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






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






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. Purchase of stock in a company from a share holder - rather than purchasing stock directly from the company.






30. 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






31. 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






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






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






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






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






36. An acquisition of a business using mostly debt and a small amount of equity. The debt is secured by the assets of the business.






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






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






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. How much the company is worth before an investment






41. 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.






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






43. 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






44. Money used to purchase equity-based interest in a new or existing company. A venture capitalists return usually comes from preferred stock - a share of profits - royalties or capital appreciation of common stock. Most venture capitalists look for c






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






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






47. 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.






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






49. Term sheet for equity offering






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