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






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






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






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






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






6. No double tax - Limited number of investors






7. How you get out






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






9. 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 -






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






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






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 company or entity into which a fund invests directly.






14. 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.






15. 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.






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






17. 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






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






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






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






21. The internal rate of return on an investment.






22. How you get to vote






23. 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.






24. 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






25. 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






26. 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.






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






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






29. 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






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






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






32. The amount of common shares of a corporation which are in the hands of investors. It is equal to the amount of issued shares less treasury stock.






33. Compound internal rate of return.






34. 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






35. How much the company is worth before an investment






36. 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.






37. 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






38. 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






39. 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






40. 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.






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






42. 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.






43. 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






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






45. 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






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






47. A type of equity ownership in a corporation - stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights.






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. 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






50. 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.