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. 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






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






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






4. 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






5. The equity ownership in a LLC. May be either common or preferred. Partnership agreement






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






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






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






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






10. 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






11. 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.






12. 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.






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






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






15. 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.






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






17. 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.






18. 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.






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






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






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






22. An IPO that has met certain






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






24. 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.






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






26. 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






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






28. 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






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






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






31. The sale or distribution of a stock of a portfolio company to the public for the first time. IPOs are often an opportunity for the existing investors (often venture capitalists) to receive significant returns on their original investment. During peri






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






33. The way you buy stock






34. 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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


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






36. A detailed document that outlines what you are going to do and how you are going to do it - including a clear and simple discussion of the idea; the management team - including full resumes; business strategy; marketing plan - including sales projec






37. 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






38. 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






39. The internal rate of return on an investment.






40. How much the company is worth before an investment






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






42. How you get to vote






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






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






45. 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






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






47. 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.






48. Allows the holder to choose whether a merge or sale will be treated as a liquidation event for the purpose of receiving the funds they are entitled to under the liquidation preferences of the term sheet






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






50. 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