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Test your basic knowledge |
Venture Capital
Start Test
Study First
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. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything
Common Stock
management buy-in (MBI)
IRR
Senior Stock
2. A brief statement covering the main points that includes a discussion of management - profits - strategic position - and exit plan
turnaround
Business Summary
equity offerings
Adjusted Book Value
3. How much the company is worth before an investment
Pre-Money Valuation
Capital Commitment
lock-up period
Liquidation Preference
4. 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.
angel investors
Common Stock
liquidation
minority enterprise small business investment companies (MESBICS)
5. 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.
minority enterprise small business investment companies (MESBICS)
Burn Rate
corporate venturing
Conversion Rights
6. Funds provided to enable an enterprise to acquire another enterprise or product line or business.
Pre-Money Valuation
buyout
Bootstrapping
syndication
7. The practice of a large company taking a minority equity position in a smaller company in a related field.
buyout
venture capital
corporate venturing
Anti-Dilution Protections
8. 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
Pre-money valuation
Series A Preferred Stock
Preferred Stock
Corporation (Limited liability and taxation)
9. This refers to a synopsis of the key points of a business plan.
Business Plan
Business Summary
executive summary
Restricted Shares
10. 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
Restricted Shares
portfolio compaay
C Corporation
Subordinated Debt
11. 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.).
institutional investors
corporate venturing
Private Equity
equity financing
12. Letter of intent summarizing the key legal and financial terms
management buy-out (MBO)
Venture Capitalist
capital gain
Term Sheet
13. An IPO that has met certain
Qualified IPO
Initial Public Offering
series a preferred stock
Preferred Stock
14. Selling an interest in your business to an outside party to raise money.
equity financing
Pre-Money Valuation
Deal Structure
going private
15. 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
institutional investors
small business investment companies (SBIC)
private equity
Pre-Money Valuation
16. How fast you can turn it into cash - termination of a business operation by using its assets to discharge its liabilities
Business Plan
return on investment (ROI)
Stock Price Agreement
Liquidation
17. 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.
lead investor
turnaround
Corporation (Limited liability and taxation)
series a preferred stock
18. A subsequent investment made by an investor who has made a previous investment in the company - generally a later stage investment in comparison to the initial investments.
follow-on
No Shop/Confidentiality
private investment in public equities (PIPE)
Senior Stock
19. 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) ...
No Shop/Confidentiality
Limited Partnership Agreement
Initial Public Offering
Cash-out election
20. The maximum amount of cash that a partner is required to contribute under the terms
debt financing
Adjusted Book Value
Capital Commitment
portfolio compaay
21. The way you buy stock
turnaround
PPM
Closing
Venture Capital Financing
22. Issue of shares of a company to the public by the company (directly) for the first time.
Business Plan
IPO(initial public offerings)
exit route
bridge loans
23. 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
executive summary
management buy-in (MBI)
Burn Rate
Cash-out election
24. Investments by a private equity fund in a publicly traded company - usually at a discount.
Membership Interest
going private
Private Equity
private investment in public equities (PIPE)
25. 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
corporate venturing
seed capital
Capital
secondary public offering
26. The total value of the company immediately prior to the latest round of financing
Pre-money valuation
Lead Investor
Capital
Adjusted Book Value
27. 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
PPM
fund of funds
Private Equity
Due Diligence
28. 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.
Dividends
lead investor
lock-up period
benchmarks
29. Date the LP's subscription is effective and they become partner
IPO (Initial Public Offering)
Closing
institutional investors
buyout
30. The final event to complete the investment - at which time all the legal documents are signed and the funds are transferred.
S Corporation
closing
buyout
Internal Rate of Return
31. The equity ownership in a corporation. Also has basic voting rights
Common Stock
lead investor
portfolio compaay
debt financing
32. Used to compute net worth as the difference between total assets and total liabilities. adjusted value up to reflect market value
Subordinated Debt
Corporation (Limited liability and taxation)
Deal Structure
Adjusted Book Value
33. Raising funds by offering ownership in a corporation through the issuing of shares of a corporation's common or preferred stock.
equity offerings
Business Summary
Due Diligence
Bridge Financing
34. Cannot get other outside investors-No Shop
Limited Partner
No Shop/Confidentiality
capital gain
Bridge Financing
35. Also known as a bell cow investor. Member of a syndicate of private equity investors holding the largest stake - in charge of arranging the financing and most actively involved in the overall project
Adjusted Book Value
Pre-money valuation
Lead Investor
Seed Money
36. 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.
Anti-Dilution Protections
Senior Stock
lock-up period
Voting Rights
37. How you get out
IPO (Initial Public Offering)
equity financing
Liquidation Preference
private investment in public equities (PIPE)
38. A study of the background and financial reliability of the company - management team and industry.
follow-on
Angel Financing
Due Diligence
Market Capitalization
39. A business owned by stockholders who share in its profits but are not personally responsible for its debts
return on investment (ROI)
Seed Money
Pre-Money Valuation
Corporation (Limited liability and taxation)
40. The rate at which a company expends net cash over a certain period - usually a month.
IPO(initial public offerings)
Burn Rate
Preferred Stock
limited partnerships
41. 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.
equity financing
Liquidity Event
Bridge Financing
Preferred Stock
42. A security with limits on its transferability. Usually issued in connection with a private placement
Private Equity
General Partner (GP)
Restricted Stock
management buy-out (MBO)
43. Individuals that provide venture capital to seed or early stage companies. They can usually add value through their contracts and expertise.
liquidation
angel investors
Bootstrapping
fund of funds
44. The equity of the company and some types of debts (subordinated debt) but generally not senior secured debt (bank loan)
benchmarks
Series A Preferred Stock
Capital
Qualified IPO
45. The amount of this available to a management team for venture investments.
Capitalization Table
closing
capital under management
Business Plan
46. An investment vehicle designed to invest in a diversified group of investment funds.
Business Plan
capital gain
Pre-Money Valuation
fund of funds
47. The rate of return or profit that an investment is expected to earn.
Burn Rate
Internal Rate of Return
Pre-money valuation
capital gain
48. 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
syndication
capital under management
Liquidation Preference
small business investment companies (SBIC)
49. 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.
limited partnerships
secondary public offering
Deal Structure
mezzanine financing
50. The equity ownership in a LLC. May be either common or preferred. Partnership agreement
Liquidation Preference
capital under management
Limited Partnership Agreement
Membership Interest