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






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






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






4. 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.






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






6. Cannot get other outside investors-No Shop






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






8. 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) ...






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






10. The amount of this available to a management team for venture investments.






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






12. 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






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






14. Compound internal rate of return.






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






16. Term sheet for equity offering






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






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






19. 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






20. 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






21. 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.






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






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






24. 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






25. 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.






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






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






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






29. How you get out






30. 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






31. 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






32. 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






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






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






35. 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.






36. 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






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






38. 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.






39. The way you buy stock






40. 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






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






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






43. The internal rate of return on an investment.






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






45. 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






46. 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






47. 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






48. 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.






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






50. 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