Test your basic knowledge |

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






2. 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






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






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






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






6. 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






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






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






9. 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






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






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.).






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. 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






14. An IPO that has met certain






15. A unit of ownership of a corporation. In the case of a public company - the stock is traded between investors on various exchanges. Owners of common stock are typically entitled to vote on the selection of directors and other important events and in






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






17. 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






18. The party that manages a limited partnership and is liable for the debts of the company






19. 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.






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






21. How much the company is worth before an investment






22. How you get out






23. A study of the background and financial reliability of the company - management team and industry.






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






25. 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.






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






27. No double tax - Limited number of investors






28. 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.






29. 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






30. 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






31. 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.






32. 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.






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






34. 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






35. 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.






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






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






38. 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






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






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






41. 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






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






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






44. The investigation and evaluation of a management team's characteristics - investment philosophy - and terms and conditions prior to committing capital to the fund.






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






46. Cannot get other outside investors-No Shop






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






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






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






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