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 way you buy stock






2. 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.






3. 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.






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






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






6. 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) ...






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






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






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






10. A security with limits on its transferability. Usually issued in connection with a private placement






11. 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.






12. 'I will buy stock at price we negotiate'






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






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






15. An IPO that has met certain






16. 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.






17. 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.






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 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.






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






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






22. 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






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






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






25. 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






26. 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.






27. No double tax - Limited number of investors






28. 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






29. How much the company is worth before an investment






30. These are performance goals against which a company's success is measured. Often - they are used by investors to help determine whether a company will receive additional funding or whether management will receive extra stock. Sometimes management wi






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






32. 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


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






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






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






36. 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






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






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






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






40. 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






41. The internal rate of return on an investment.






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






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






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






45. 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






46. Compound internal rate of return.






47. Term sheet for equity offering






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






49. The rate of return or profit that an investment is expected to earn.






50. 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.