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 act of one company taking over controlling interest in another company. Investors often look for companies that are likely candidates for this - because the acquiring firms are often willing to pay a premium to the market price for the shares.






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






3. 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






4. 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.






5. Compound internal rate of return.






6. 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.






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






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






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






10. 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.






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






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






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






14. 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






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






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. 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






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






19. How you get out






20. 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.).






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






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






23. How you get to vote






24. No double tax - Limited number of investors






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






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






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






28. The internal rate of return on an investment.






29. 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.






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






31. 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






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






33. 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.






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






35. 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






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






37. 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






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






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






40. 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.






41. Cannot get other outside investors-No Shop






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. 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






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. 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






46. 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






47. 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






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






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






50. 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