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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 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.






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






3. Cannot get other outside investors-No Shop






4. 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.






5. 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.






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






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






8. 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






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






10. 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.






11. The internal rate of return on an investment.






12. 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






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






14. 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






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






16. The way you buy stock






17. 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.






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






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






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






21. 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






22. 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






23. 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






24. 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


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






26. Term sheet for equity offering






27. How fast you can turn it into cash - termination of a business operation by using its assets to discharge its liabilities






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






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






30. Don't talk to the market about the company






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






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






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






34. 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






35. 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.






36. No double tax - Limited number of investors






37. 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






38. 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.






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






40. 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






41. 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.






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






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






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






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






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






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






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






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






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