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






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






3. 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.






4. How you get to vote






5. 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






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






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






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






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






10. 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.






11. 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






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






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






14. Term sheet for equity offering






15. 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






16. Document between general and limited partnership of each fund spells out details of the partnership.






17. 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


18. 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.






19. 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






20. No double tax - Limited number of investors






21. The internal rate of return on an investment.






22. How much the company is worth before an investment






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






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






25. 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






26. 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






27. Capital raised for a private company from independently wealthy investors. This capital is generally used as seed financing.






28. 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.






29. 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) ...






30. 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.






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






32. 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






33. 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.






34. 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






35. 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.






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






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






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






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






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






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






42. 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






43. The period an investor must wait before selling or trading company shares subsequent to an exit. Usually in an initial public offering this period is determined by the underwriters.






44. 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






45. Cannot get other outside investors-No Shop






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






47. 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.).






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






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






50. Compound internal rate of return.