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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. 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.






2. 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.






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






4. Term sheet for equity offering






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






6. 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.






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






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






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






10. No double tax - Limited number of investors






11. 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.






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






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






14. 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.






15. Investments by a private equity fund in a publicly traded company - usually at a discount.






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






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






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






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






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






21. Cannot get other outside investors-No Shop






22. 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






23. 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






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






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






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






27. 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.






28. 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.






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






30. 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






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






32. 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






33. 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






34. 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






35. 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.






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






37. 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






38. 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.






39. 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.






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






41. 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) ...






42. The sale of the assets of a portfolio company to one or more acquirers when venture capital investors receive some of the proceeds of the sale.






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






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






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






46. 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






47. 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






48. 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






49. How you get to vote






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