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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. An IPO that has met certain






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






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






4. Compound internal rate of return.






5. 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






6. 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.






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






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. 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.






10. 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






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






12. 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.






13. 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






14. 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






15. 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






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






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






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






19. 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






20. 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






21. 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.






22. 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






23. 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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24. 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






25. Funds provided to enable operating management to acquire a product line or business - which may be at any stage of development - from either a public or private company.






26. 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






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






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






29. The way you buy stock






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






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






32. 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






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






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






35. 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






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






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






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






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






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






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






42. 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 -






43. 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.






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






45. The equity of the company and some types of debts (subordinated debt) but generally not senior secured debt (bank loan)






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






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






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






49. 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.






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