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






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






3. The event in which the company is liquidated or sold (bankruptcy or sale to a public company)






4. 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.).






5. 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






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. How fast you can turn it into cash - termination of a business operation by using its assets to discharge its liabilities






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






9. How you get to vote






10. 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.






11. 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






12. 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






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






14. How much the company is worth before an investment






15. 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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16. 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






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






18. 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






19. 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.






20. Purchase of a business by an outside team of managers who have found financial backers and plan to manage the business actively themselves.






21. 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






22. 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.






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






24. 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.






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






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






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






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






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






30. 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






31. 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






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






33. 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






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






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






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






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






38. 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






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






40. 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






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






42. 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






43. 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.






44. The final event to complete the investment - at which time all the legal documents are signed and the funds are transferred.






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






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






47. 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.






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






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






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