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






2. 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.






3. How you get out






4. 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






5. 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.






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






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






8. First to absorb losses. Represents common shareholders' investment in a company. It includes common stock value - retained earnings - capital surplus.






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






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






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






12. 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






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






14. Capital raised for a private company from independently wealthy investors. This capital is generally used as seed financing.






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






16. The residual ownership in a company like a corporation or LLC 51%=control






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






18. 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






19. 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






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






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. 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.






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






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






25. 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) ...






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






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






29. 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.






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






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






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






34. 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.






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






36. 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.






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






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






39. 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






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






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






42. How you get to vote






43. 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.






44. No double tax - Limited number of investors






45. 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






46. An IPO that has met certain






47. 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






48. The amount of this available to a management team for venture investments.






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






50. 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.