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






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






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






5. The method by which an investor will realize an investment.






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






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






8. 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.






9. 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






10. The valuation of a company immediately after the most recent round of financing. For example - a venture capitalist may invest $3.5 million in a company valued at $2 million 'pre-money' (before the investment was made). As a result - the startup will






11. 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.






12. How you get out






13. 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.






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






15. 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






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






17. 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.






18. 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






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






20. Equity securities of companies that have not 'gone public' (are not listed on a public exchange). Private equities are generally illiquid and thought of as a long-term investment. As they are not listed on an exchange - any investor wishing to sell






21. No double tax - Limited number of investors






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






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






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






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






27. 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






28. 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






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






30. An IPO that has met certain






31. Term sheet for equity offering






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






33. 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






34. The event in which the company is liquidated or sold (bankruptcy or sale to a public company)






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






36. 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.






37. 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






38. 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.






39. Cannot get other outside investors-No Shop






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






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






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






43. The way you buy stock






44. 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.






45. 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






46. It refers mainly to insurance companies - pension funds and investment companies collecting savings and supplying funds to markets - but also to other types of institutional wealth (e.g. endowments funds - foundations etc.).






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






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






49. This refers to obtaining capital from investors or venture capital sources.






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