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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. 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.






2. 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.).






3. 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






4. 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






5. 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






6. 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.






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






8. 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






9. An investment in a startup business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.






10. The repurchasing of all of a company's outstanding stock by employees or a private investor. As a result of such an initiative - the company stops being publicly traded. Sometimes - the company might have to take on significant debt to finance the






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






12. 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






13. Term sheet for equity offering






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






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






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






17. 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.






18. Cannot get other outside investors-No Shop






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






20. The way you buy stock






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






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






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






24. 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






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






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






27. 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






28. 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






29. How you get to vote






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






31. 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.






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






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






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






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






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






37. 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






38. The investor who leads a group of investors into an investment. Usually one venture capitalist will be this when a group of venture capitalists invest in a single business.






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






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






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






42. 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.






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






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






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






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






47. Compound internal rate of return.






48. 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.






49. 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






50. 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