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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. 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.






2. Cannot get other outside investors-No Shop






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






4. 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






5. 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






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






7. 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.






8. How you get to vote






9. Compound internal rate of return.






10. 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






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






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






13. 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.






14. 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






15. 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






16. 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






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






18. 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






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






20. Individuals that provide venture capital to seed or early stage companies. They can usually add value through their contracts and expertise.






21. 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






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






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






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






25. 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






26. 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.






27. 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






28. 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 -






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






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






31. How you get out






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






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






34. The way you buy stock






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






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






37. 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.






38. 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.






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






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






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






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






43. No double tax - Limited number of investors






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






45. 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






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






47. 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.






48. 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.






49. 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






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