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






2. How you get to vote






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






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






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






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






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






8. 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






9. 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.






10. 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.






11. 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.






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






13. The internal rate of return on an investment.






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






15. 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.






16. 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) ...






17. 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






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






19. 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






20. 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






21. 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






22. 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






23. 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


24. 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.






25. 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.






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. 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.).






28. 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






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






30. 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






31. Compound internal rate of return.






32. 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.






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






34. How much the company is worth before an investment






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






36. Unsecured debt - junior to senior debt (bank loan) and is senior to common stock and preferred. Gets paid last






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






38. 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.






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






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






41. The way you buy stock






42. 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.






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






44. Cannot get other outside investors-No Shop






45. The legal structure used by most venture and private equity funds. Usually fixed life investment vehicles. The general partner or management firm manages the partnership using policy laid down in a partnership agreement. The agreement also covers -






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






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






48. 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






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






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