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






2. An IPO that has met certain






3. 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.






4. How you get out






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






6. 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.).






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






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






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






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






11. 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






12. 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






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






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






15. How you get to vote






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






17. 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.






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






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






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






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






22. 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






23. 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






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






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






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






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






29. 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






30. 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.






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






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






33. Shares acquired in a private placement are considered restricted shares and may not be sold in a public offering absent registration - or after an appropriate holding period has expired. Non-affiliates must wait one year after purchasing the shares






34. The internal rate of return on an investment.






35. 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.






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






37. 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






38. 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 -






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






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






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






42. No double tax - Limited number of investors






43. 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






44. 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.






45. 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.






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






47. 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






48. 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.






49. Term sheet for equity offering






50. 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







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