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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. 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






2. A financial institution specializing in the provision of equity and other forms of long-term capital to enterprises - usually to firms with a limited track record but with the expectation of substantial growth. The venture capitalist may provide bot






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






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






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






6. Cannot get other outside investors-No Shop






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






8. No double tax - Limited number of investors






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






10. 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.






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






12. Term sheet for equity offering






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






14. The repurchasing of all of a company's outstanding stock by employees or a private investor. As a result of such an initiative - the company stops being publicly traded. Sometimes - the company might have to take on significant debt to finance the






15. A type of equity ownership in a corporation - stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights.






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






17. 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






18. 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






19. 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






20. The way you buy stock






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






22. 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






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






24. 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 -






25. 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






26. An IPO that has met certain






27. 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.






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






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






30. How much the company is worth before an investment






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






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






33. A business owned by stockholders who share in its profits but are not personally responsible for its debts






34. 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






35. 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






36. 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






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






38. 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.






39. 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.






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






41. 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.






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






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






44. 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






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






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






48. The reorganization of a company's capital structure. A company may seek to save on taxes by replacing preferred stock with bonds in order to gain interest deductibility.






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






50. Compound internal rate of return.