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 total value of the company immediately prior to the latest round of financing






2. 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.






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






4. 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






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






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






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






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






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






10. 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.






11. 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






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






13. 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.






14. 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.






15. 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






16. 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.).






17. 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






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






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






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






21. 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.






22. 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






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






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






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






26. The practice of a large company taking a minority equity position in a smaller company in a related field.






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






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






29. Date the LP's subscription is effective and they become partner






30. 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






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






32. 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






33. Cannot get other outside investors-No Shop






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






35. 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.






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






37. 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






38. How you get to vote






39. The way you buy stock






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






41. A form of equity ownership in a corporation that contains preferences over common stock - stock whose holders are guaranteed priority in the payment of dividends but whose holders have no voting rights






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






43. No double tax - Limited number of investors






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






45. 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






46. 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






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






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






49. 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






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