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






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. 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.






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






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






6. 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






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






8. 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






9. 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






10. Cannot get other outside investors-No Shop






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. 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






13. 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






14. How you get to vote






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






16. 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.






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






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. A limited amount of equity or short-term debt financing typically raised within 6-18 months of an anticipated public offering or private placement meant to 'bridge' a company to the next round of financing.






20. 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.






21. 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






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






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






24. 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






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






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






27. 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.).






28. 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.






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






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






31. 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






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






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






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






36. Term sheet for equity offering






37. A non-binding agreement setting forth the basic terms and conditions under which an investment will be made. This is a template that is used to develop more detailed legal documents.






38. 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






39. 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






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






41. 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.






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






43. 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) ...






44. 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






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






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






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






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






49. Compound internal rate of return.






50. 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.