Test your basic knowledge |

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






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






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






4. Term sheet for equity offering






5. A non-binding agreement setting forth the basic terms and conditions under which an investment will be made. This is a template that is used to develop more detailed legal documents.






6. 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






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






8. 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.






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






10. 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






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






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






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






14. 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.






15. 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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


16. 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






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






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






19. 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






20. 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.






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






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






23. Cannot get other outside investors-No Shop






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






25. 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.






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






27. The internal rate of return on an investment.






28. Compound internal rate of return.






29. An IPO that has met certain






30. The first round of capital for a start-up business. Seed money usually takes the structure of a loan or an investment in preferred stock or convertible bonds - although sometimes it is common stock. Seed money provides startup companies with the cap






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






32. 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.






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






34. 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






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






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






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






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






39. Force sell of stock at a predetermined price. The rights by which the investor's preferred stock or subordinated debt 'converts' into common stock






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






41. 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






42. The way you buy stock






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






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






45. How much the company is worth before an investment






46. How you get to vote






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






48. 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






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






50. 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