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Venture Capital

Subject : industries
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. Capital raised for a private company from independently wealthy investors. This capital is generally used as seed financing.






2. 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.






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






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






5. An investment vehicle designed to invest in a diversified group of investment funds.






6. 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






7. Cannot get other outside investors-No Shop






8. Funds provided to enable an enterprise to acquire another enterprise or product line or business.






9. 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.






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






11. No double tax - Limited number of investors






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






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






14. 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.






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






16. 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






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






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.






19. 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






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






21. Most senior form of debt and is usually secured by the assets of the company. Cannot vote on anything






22. How you get to vote






23. 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






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 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 -






26. When an investor sells a stock - bond or mutual fund at a higher price than he or she paid for it.






27. 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






28. 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.).






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






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






31. The way you buy stock






32. 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






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






34. 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.






35. 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






36. Term sheet for equity offering






37. 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

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38. 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






39. 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






40. An IPO that has met certain






41. 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.






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






43. 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






44. The internal rate of return on an investment.






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






46. 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.






47. The practice of a large company taking a minority equity position in a smaller company in a related field.






48. 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






49. 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.






50. 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