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






2. 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.






3. 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






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






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






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






7. 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.






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






9. 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






10. 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






11. 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






12. 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.






13. An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.






14. 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






15. 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.






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






17. Term sheet for equity offering






18. 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






19. How much the company is worth before an investment






20. 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






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






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






23. 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






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






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






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. 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.






28. 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






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






30. 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






31. 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.






32. Compound internal rate of return.






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






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






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






36. 'IOU' for stock - form of equity similar to option allowing the Warrant holder to exercise the Warrant and obtain equity






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






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






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






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






41. 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.






42. 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.






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






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






45. 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 -






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






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






48. 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






49. 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.






50. 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