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






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






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






4. Money that business owners must pay back with interest. There are myriad types of these - from simple commercial loans to bridge/swing loans in which a lender makes a short-term loan in anticipation of equity financing at a later stage in the develo






5. 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






6. 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.






7. 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






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






9. 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.






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






11. 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.






12. 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.






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






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






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






16. Cannot get other outside investors-No Shop






17. 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.






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






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






20. 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






21. 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






22. 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


23. The legal structure used by most venture and private equity funds. Usually fixed life investment vehicles. The general partner or management firm manages the partnership using policy laid down in a partnership agreement. The agreement also covers -






24. 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






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. An IPO that has met certain






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






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






29. 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






30. 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






31. 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






32. 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.






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






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






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






36. Term sheet for equity offering






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






38. How you get to vote






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






40. 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.






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






42. 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






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






44. How much the company is worth before an investment






45. 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






46. 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






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






48. No double tax - Limited number of investors






49. 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.






50. 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